External factors a worry for Thai economic recovery despite rising consumer confidence: UTCC

The UTCC surveyed 2,242 people from around the country and found that the consumer confidence index in September had risen to 44.6, up from 43.7 in August.

UTCC president Thanawat Phonwichai said that the index had seen increases for four consecutive months and had reached its highest level during the year since January.

Meanwhile, the confidence in the Thai economy was at 38.6, confidence in job opportunities at 41.9, and confidence in future income at 53.3.

He said the consumer confidence index had been on an upward trend as the Covid-19 situation is under control and prevention measures have been eased across the country, allowing businesses to operate normally.

In addition, foreign travellers could enter the country more easily while the price of petrol had reduced significantly from the first half of the year.

However, consumers are concerned about the retail fuel price as it has stayed at a high level and they are also concerned about the high cost of living, the Ukraine-Russia tensions and increasing interest rate due to high inflation.

They are factors that could pressure economic recovery and might cause a recession, he said, affecting consumer confidence and Thai economic recovery.

He expected Thai economic growth to slow down and be lower than the 3.0-3.5 per cent forecast for this year.

However, consumer confidence has increased continuously due to expectations that the Thai economy would recover significantly in the fourth quarter of this year.

He mentioned the TCC Confidence Index in September was at 42.5, increasing from 40 in August. The increase for four straight months points to the faith of business operators that the economy is recovering.

Thanawat explained that the Cabinet's decision to provide economic stimulus measures to relieve the effects of Covid-19 and the cost of living was a positive factor.

Thai exports in August grew by 7.54 per cent, and the economy was also supported by tourism and diesel price support. The private sector is, however, concerned about the Ukraine-Russia war and currency volatility, as they might affect investment in the future.

Thanawat said the economy has recovered, but it is still vulnerable so the government sector must support those who were affected by floods, by keeping the interest rate low, manage the price of energy, and come up with measures to help control manufacturing costs.

As for floods, the centre estimated the damage at around 12 to 20 billion baht — 6 billion to 8 billion baht in the agricultural sector and 6 billion to 12 billion in the industrial sector.

He said the affect would be low as the floods mostly affected fields and not livestock.