Thai consumer confidence hits 11-month low

Thai consumers’ confidence in July continued to decline, marking the fifth consecutive month and reaching the lowest point in 11 months. The consumer confidence index fell from 58.9 to 57.7, driven by concerns over political stability in Thailand.

Thanavath Phonvichai, President of the University of the Thai Chamber of Commerce and Chairman of the Advisory Centre for Economic and Business Forecasting, reported these findings. Consumers are worried about the potential instability stemming from future Constitutional Court decisions regarding the dissolution of the Move Forward Party (MFP) and the status of the prime minister.

The confidence index, which remains below 100, indicates that consumers believe the economy is recovering slowly. The lack of clear economic stimulus measures and rising energy prices, especially petrol, contribute to this sentiment.

Additionally, ongoing conflicts in the Middle East and the fragile global economy, weakened by the US economic slowdown, add to consumer anxieties.

“Consumer confidence has declined as people are concerned about potential political instability in Thailand’s future, particularly regarding the prime minister.

“They also perceive the Thai economy as heading downward due to insufficient budget disbursement, which could risk GDP growth falling below 2.5% this year if the government does not implement clear economic stimulus measures.

“The global economic fragility, driven by the US recession and rising unemployment rates, is evident from the significant drops in global stock indices, especially in Asia, which fell by 5%.”

Boost economy

Thanavath expressed confidence that the government’s economic stimulus measure, which involves distributing 10,000 baht in digital wallets, will proceed as planned. This initiative is expected to commence in December, with 80% of recipients spending the money within the first month.

This could inject 200 to 250 billion baht into the economy initially, and spending over the subsequent three months, extending into January and February 2025 could circulate 300 to 400 billion baht in total. This would potentially boost Thailand’s economic growth by 0.5 to 0.7%, raising the overall growth rate to 2.6 to 2.8%, higher than the previous forecast of 2.4 to 2.6%.

Attention must also be focused on the Constitutional Court’s decision on Prime Minister Srettha Thavisin’s ministerial status. Should a political upheaval necessitate a change of prime minister, it could result in a political vacuum lasting around four months, impacting the overall economic management of the country.

This scenario could drag Thailand’s economic growth down by 0.3%, potentially limiting annual expansion to just 2%. However, the decision regarding the dissolution of the Move Forward Party is not expected to significantly affect the economic system, reported KhaoSod.