Consumer confidence contracted for 29 months in a row as of May, the University of the Thai Chamber of Commerce (UTCC) said on Thursday.
The consumer confidence index fell to a historic low, the likes of which haven’t been seen since 1998 when it fell to 50.3 in March. Things have not gotten any better in this aspect since then.
Looking further back, the index fell from 67.3 in January to the current of 31.3 in May.
UTCC’s president Thanavath Phonvichai cites the National Economic and Social Development Council (NESDC)’s announcement that the country output (GDP) has contracted by 1.8 per cent in the first quarter of 2020 as the reason.
The NESDC also lowered its GDP prediction for 2020 from an expansion of 1.5-2.5 per cent to a recession of 5-6 per cent.
The extension of the State of Emergency has contributed to the drop in consumer confidence, and despite the government easing lockdown measures, some businesses are still closed.
The unemployment rate also continues to increase while crop and oil prices remain low. These reasons have slightly strengthened the Thai baht from an average of 32.63 baht per dollar at the end of April to 32.04 baht per greenback at the end of May.
Thanavath said, however, that the reopening of businesses, low interest rates, the returning of domestic tourism, the government’s job creation projects for offloaded workers, and the soft loan policies for SMEs should all be able to boost consumer confidence in June.
UTCC recommended that the government should continue to ease lockdown measures to allow more businesses to reopen, accelerate its soft loan policies to provide more access to liquidity for troubled SMEs, begin the travel bubble negotiations, and reopen border trading.
Without such moves, and if the relief and stimulus measures are not tangible, Thailand could go into a recession of 8.8 per cent in 2020, Thanavath added.
