Thai consumer confidence dropped for a fourth straight month in June, falling to its lowest level since October last year on concerns over a global slowdown and political uncertainty, according to a survey carried out by the University of the Thai Chamber of Commerce (UTCC).
Thanavath Phonvichai, president of UTCC, said the consumer confidence index dipped to 58.9 in June, from 60.5 in May.
Consumers were increasingly worried about a global economic slowdown, rising energy prices, and a prolonged conflict in the Middle East.
They were uncertain about whether the economy would recover quickly, especially with political court cases coupled with vague economic stimulus measures by the government, the university said.
Moreover, the acceptance of a petition from 40 senators seeking to remove Srettha Thavisin as prime minister by the Constitutional Court has increased the prospect of greater government instability.
An index below 100 points signifies weak confidence, related to the slow rate of economic recovery, higher living costs, elevated interest rates, and geopolitical conflicts affecting consumer purchasing power and their confidence in terms of spending.
However, consumer confidence was likely to improve if the government sped up budget disbursements and helped stimulate an economic recovery in the fourth quarter of this year, it said.
A separate survey of 369 chamber members from across the country dropped for a second straight month in June to 54.2, from 55.1 in May, with the decline attributed to high household debt, lower consumer purchasing power, concern over the increase in the daily minimum wage which will increase production costs, limited access to loans, and political uncertainties which may affect the approval of the fiscal 2025 budget.
UTCC expects the Thai economy to grow by 2.5% in 2024, and within a range of 2.8-3% if the digital wallet handout scheme is implemented.
The Thai economy is still recovering slowly in the third quarter of 2024 and growing below expectations, with more robust growth expected in the fourth quarter supported by tourism, private consumption, investment, and exports.
The government's recent announcement that it would scale down the budget for the digital wallet scheme to 450 billion baht, from 500 billion baht, would reduce GDP growth by 0.05-0.1%.
