Thai consumers riding high for sixth straight month

Consumer confidence in Thailand has been on a steady rise, marking its sixth successive month of growth last month in January. Levels have reached a high unseen since March 2020, attributed to the government’s strategic stimulus measures, including spending boosts and reductions in electricity and fuel prices.

Yesterday’s report from the University of the Thai Chamber of Commerce (UTCC) revealed a climb in the consumer confidence index to 62.9 in January from 62.0 in December. This follows a consistent upward trend from 60.9 in November, 60.2 in October, 58.7 in September, 56.9 in August and 55.6 in July, said UTCC President Thanavath Phonvichai.

“People are starting to see a gradual improvement in the economy, driven by the recovery of domestic tourism, expansion of exports and improved crop prices.”

Thanavath further projected a positive outlook for the second half of the year, with the start of the fiscal 2024 budget disbursement expected to spur consumer confidence and economic growth in the fourth quarter. The tourism sector is anticipated to play a significant role in the economic expansion in the first half of the year. The UTCC estimates a growth of 3.0-3.5% for the year, with the potential for it to approach 4% if the government initiates its digital wallet scheme, reported Bangkok Post.

Thanavath highlighted four key factors set to drive the economy this year: tourism, exports, agricultural product prices, and government spending.

“We expect the economy to gradually recover, with a clear rebound in the fourth quarter, attributing importance to government stimulus measures, particularly the digital wallet scheme.”

Tourism sector

Potential growth drivers include the improving tourism sector and exports. In addition, agricultural product prices are expected to rise, leading to increased income for farmers and potentially pushing the GDP growth rate beyond 3%.

Alongside this, the UTCC released the TCC Confidence Index, a measurement of business sector sentiment and the confidence of chamber members across all provinces. The index saw a slight increase to 54.8 in January from 54.7 in December, thanks to government stimulus programmes, visa facilitation for tourists from chosen countries, a rise in foreign tourist arrivals, stable diesel prices, growing exports, and an increase in farmer income due to higher agricultural product prices.

The UTCC also projected a 5.4% year-on-year increase in spending for the Valentine’s Day period, estimating a total expenditure of 2.52 billion baht (US$ 69,844,788). This figure represents the highest expenditure in five years, with average spending per person rising to 2,125 baht (US$59) from 1,847 baht in the previous year.