[BANGKOK] Consumer confidence in Thailand fell for the third straight month in March, a university survey showed on Thursday, as low commodity prices and worries over the stumbling economy crimped domestic demand.
The consumer confidence index of the University of the Thai Chamber of Commerce fell to 77.7 in March from 79.1 in February.
The March reading is the lowest since June 2014, when confidence was rising as Thais hoped for a pick-up in the economy after an army coup the month before that ended a long period of destabilising political unrest.
But the military government has struggled to revive the economy as exports remain weak and domestic demand subdued.
Low commodity prices have hurt exports, a key economic driver, and cut farmers' income and purchasing power. The economy grew just 0.7 per cent last year, the lowest since flood-hit 2011. "Consumers were not confident about the economy and there are signs that confidence will fall further," Thanavath Phonvichai, an economics professor at the university, told a briefing, adding this was itself a negative sign for growth. "Nobody is talking about an upside," he said, adding the university was revising its economic growth forecast again.
He said the economy might grow around 3 per cent this year, rather than the 3.5-4.0 per cent it had predicted.
The military-backed government is aiming for 4 percent growth this year, driven by public spending, although that has been slow so far.
Private consumption, which accounts for half of gross domestic product (GDP), has been curbed by household debt, at a record high of 85.9 per cent of GDP at the end of 2014.
Sudthanom Phusanaphat, a government employee, said: "The economy is OK, but I'm so indebted I have little left to spend." Last month, the Bank of Thailand unexpectedly cut its policy interest rate but by a close 4-3 vote, suggesting policymakers are struggling with the need to spur growth without adding to high household debt burdens.
While a drop in consumer prices in the first quarter has given the central bank room to cut rates again, most analysts expect no change when it reviews policy on April 29, as further easing would do little to encourage indebted consumers to spend.
The consumer price index fell for the third straight month in March, down 0.57 per cent from a year earlier. REUTERS