Bangkok, Consumer confidence in July 2024 continued to contract for the 5th month, amid concerns over politics, the slow recovery of the overall economy, high cost of living, and concerns over foreign wars. Meanwhile, the Thai Chamber of Commerce’s confidence index reflects concerns from all private sectors about the domestic and global economies. It recommends that the government urgently seek measures to address household debt, high cost of living, and access sources of funds to enhance business liquidity, hoping to accelerate disbursement of the 2024 and 2025 budgets, including digital wallets, which will help boost confidence. Meanwhile, spending on Mother’s Day this year is not brisk, which is concerning in many areas. However, the Forecasting Center estimates that the Thai economy will grow by 2.6-2.8% for the whole year.
Mr. Thanawat Polvichai, President of the University of the Thai Chamber of Commerce and Chairman of the Advisory Board of the Economic and Business Forecasting Center, said that the
results of the consumer confidence index survey for July 2024 have continuously decreased for the 5th month and are at the lowest level in 11 months since September 2023 onwards. This is because consumers are starting to worry again about the instability of Thai politics regarding the Constitutional Court’s decision on the dissolution of the Move Forward Party and the Prime Minister’s position as a minister. This has caused consumers to worry about future political stability and consumers’ concerns about the Thai economy, which is still slowing down and recovering slowly because there are still no clear economic stimulus measures. In addition, energy prices have increased, especially gasoline, and consumers are still concerned about the slowing global economic situation. The war in the Middle East, which is still protracted and escalating, may be factors that increase the pressure on the slow recovery of the Thai economy.
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The overall economic confidence index, overall job opportunity confidence inde
x, and future income confidence index were at 51.3, 54.9, and 66.8, respectively, decreasing for the fifth consecutive month in 11 months for all items, compared to the indexes in June, which were at 52.6, 56.1, and 67.9, respectively. The fact that the indexes are still below normal (at 100) indicates that consumers are still not confident about the economic situation, job opportunity, and future income because they are concerned about the domestic political situation, energy prices and living costs that are still high, and the global economy is at risk of slowing down, which will affect the Thai economy and employment and may have a slow recovery in the future, which will make consumers’ future income highly uncertain.
The Consumer Confidence Index (CCI) has decreased from 58.9 to 57.7, the fifth consecutive month of adjustment and the lowest level in 11 months since September 2023. The fact that the overall consumer confidence index remains below 100 indicates that consumers still see the overall economic
situation as still recovering slowly and the high cost of living, as well as the ongoing war between Russia and Ukraine, Israel and Hamas in the Gaza Strip, having a negative psychological impact on domestic purchasing power, the tourism sector, the export sector, general businesses, and future employment, which still has the potential to continuously undermine current and future consumer confidence in the near future.
Current consumer confidence fell from 42.8 to 41.5, while the future confidence index fell from 66.7 to 65.4. The fact that the consumer confidence index has continued to decline for the fifth month in 11 months across all items indicates that consumers are starting to be unsure whether the economy will recover quickly, especially when the current political situation is becoming more volatile from the consumer perspective. Consumer confidence is likely to continue to improve in the near future if the government accelerates budget disbursement and stimulates the Thai economy to recover in a tan
gible way through the 10,000-baht digital wallet project in the fourth quarter of this year.
As for the opinions of the business sector from members of the Thai Chamber of Commerce in every province across the country, the Thai Chamber of Commerce Confidence Index in July 2024 has continuously decreased for the 3rd month, at 52.2, but is still above the midpoint of 50 in every region, including all indicators, including the overall economy, consumption, investment, tourism, agriculture, industry, trade, border trade, and services, which have improved from measures to stimulate tourism throughout Thailand. Domestic politics, especially waiting for the Constitutional Court to rule on the prime minister, high household debt, and high cost of living.
In this regard, we would like the government to solve household debt, access to sources of funds to enhance liquidity for businesses as a whole, and include measures to regulate and solve problems caused by volatile weather, areas that may be affected by natural di
sasters, take care of problems with rising costs that affect SME business expenses, control the prices of various production factors to be in an appropriate range because it will affect business expenses, measures to help increase business potential to access opportunities in new markets both domestically and internationally, guidelines to support the government in terms of measures to stimulate spending, such as measures to continuously promote tourism, stimulus measures that can increase purchase orders for goods and services in all business sectors, and maintain the stability of the baht at a level appropriate for the current economic situation.
The results of the National Mother’s Day poll on August 12, 2024, overall, due to the high cost of living and the economy not being very good, resulted in spending on Mother’s Day this year decreasing compared to the same period last year. This year, spending on activities during Mother’s Day was 15,400.88 million baht, down 3.7 percent compared to last year’s tot
al of 15,926.45 million baht, which will be activities such as taking mothers to make merit, having meals, traveling to the provinces, etc. The main reasons for the decrease in spending on Mother’s Day this year are the high cost of living, the current economy is not very good, a lot of debt, unstable financial stability and income, including job stability, high interest rates, etc.
However, the center expects that despite some positive factors, the Thai economy still has many factors that need to be monitored. Therefore, the Thai economy in the second quarter should grow close to an average of 1.5% and in the third quarter, we will have to see whether the budget disbursement acceleration for the fiscal year 2024 must be accelerated before the end of the fiscal year 2024 and continue into 2025. It is believed that this will make the economy in the third quarter grow more than 2% and in the fourth quarter, there will be money from the digital wallet project with a total budget of 450 billion baht. It is expec
ted that in December 2024, more than 250 billion baht will be spent, with people spending all the money at once and the rest will be gradually spent in the first quarter of 2025, resulting in the Thai economy growing at a rate of 2.6-2.8% this year. However, if there is no digital wallet, the Thai economy will grow only 2.4-2.6%.
Therefore, what the government needs to do urgently is to explain the digital wallet project to all parties so that they have a better understanding, and they need to keep an eye on the Constitutional Court’s decision on the prime minister. If he comes out and has to change or find a new prime minister, they need to further analyze what the new prime minister and the cabinet will look like. In the short term, it will have some impact on the Thai economy, but not much, and if the policy does not change anything, the economy will be able to move forward.
Source: Thai News Agency