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Thai consumer confidence index slips in Jan as economy worries rise
[BANGKOK] Consumer confidence in Thailand fell in January from an 18-month high, a university survey showed on Thursday, as worries about the global and domestic economy offset benefits from lower gasoline prices.
The consumer confidence index of the University of the Thai Chamber of Commerce slipped to 80.4 last month from 81.1 in December.
Reduced retail gasoline prices lowered living costs, which encouraged consumer purchases, but lower prices for commodities that Thailand produces, rubber and rice, hurt demand. "The bustling new year period is gone and purchasing power from the provinces disappeared as falling prices of commodities have started to sap consumption," Thanavath Phonvichai, an economics professor at the university, told reporters.
He said the economy "has recovered slowly and people are not confident that it will really make a comeback", as rice and rubber prices are likely to stay low. "How fast consumption will improve depends on government disbursement to boost the economy at a time exports and tourism have yet to fully recover," Thanavath added.
Following a coup in May, the military government has struggled to revive growth. With exports and domestic demand weak, Southeast Asia's second-largest economy grew only 0.2 per cent in the first nine months of 2014 from 2013.
The Bank of Thailand (BOT) predicts 2014 growth of 0.8 per cent and the International Monetary Fund sees 0.5 per cent. Official data is due on Feb. 16.
Consumption, which accounts for half of the economy, has been crimped by high household debt, one reason the BOT has held its policy interest rate at 2 per cent since March.
With consumer prices falling and economic growth weak, some analysts expect the BOT to cut the rate at its March 11 meeting.
But the BOT said on Tuesday it had no plans to adjust monetary policy despite the first annual decline in consumer prices in more than five years in January.
The headline consumer price index fell 0.41 per cent.
The university's confidence index began declining months before Thailand entered a period of political turmoil in late 2013. Through April 2014, it fell 13 consecutive months. "I'm not so confident about our economy. It's not doing so well." said Sumate Boonsook, a 44-year-old motorcycle taxi driver.
Food vendor Sophonvit Boontham said: "Things have been quiet since the coup. Tourists are cautious about visiting Thailand."