Thailand’s consumer confidence index fell to a five-month low at 50.1 points in December, the forecasters at the Thai Chamber of Commerce said on Thursday.
The index decreased from 52.4 points in November, the first contraction in three months, according to Center for Economic and Business Forecasting at the University of the Thai Chamber of Commerce (UTCC).
Economic sentiment dropped to 43.5 in December from 45.6 points in the previous month, job-opportunities sentiment to 47.5 points from 50, and future-income sentiment to 59.2 points from 61.6.
The UTCC said that concern over the latest Covid-19 outbreaks has been affecting the domestic economy especially in the tourism and services sectors, coupled with lowered economic growth projection from most organizations.
Meanwhile, the positive factors according to the economic centre were the central bank’s policy to keep the base interest rate at 0.5 per cent, and government stimulus plans to enhance economic recovery.
Thanavath Phonvichai, the UTCC’s president, predicts that consumers will significantly delay their spending during the first quarter of the year until the virus situation resolves.
“The result of outbreak control measures and domestic political situations must be monitored in the first half of 2021, as both will have a big impact on consumer confidence from now on.”
The worst is yet to come
Thanavath said that the UTCC had completed the survey before the government implemented the latest semi-lockdown measures in many provinces.
“The downturn in December is just the beginning. If the situation doesn’t improve at the end of January, there is a chance that the index will hit a record low in the next two months.”
However, the president said he expects the coronavirus situation to ease by the end of March. The ongoing impact on consumer behaviour would then depend on the rigour of any persistent control measures, he said.
“The psychological effects are related to the number of infections each day, so it is very important to stop the growing number with intense measures,” said Thanavath.
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