Consumer confidence picked up for a third straight month in July, boosted by state relief programmes and the continued easing of coronavirus curbs.
The University of the Thai Chamber of Commerce (UTCC) reported on Friday that the consumer confidence index rose to 50.1 in July from 49.2 in June, 48.2 in May and 47.2 in April.
Despite improving sentiment, the index remains at the lowest levels since October 1998.
Thanavath Phonvichai, president of the UTCC, said the improved sentiment stemmed largely from easing coronavirus restrictions, the government’s economic rehabilitation measures and the improving outbreak situation.
“Consumer confidence gaining for the third month in a row shows that most consumers feel the economy bottomed out in the second quarter,” he said. “But they are still concerned about a second wave of infections and the prospect of unemployment because of the crisis.”
Mr Thanavath said that despite better consumer sentiment, overall confidence is still lower than pre-pandemic levels and consumers have slowed their spending because of lingering concerns about their future income, an uncertain economic recovery and the higher cost of living.
Political concerns have arisen, as people remain sceptical about political stability even after the recent cabinet reshuffle.
Street protests and political rallies held by university students are also expected to increase after universities reopen next week, Mr Thanavath said.
“The new cabinet, especially the finance and energy ministers, needs to speed up implementing economic stimulus packages as soon as possible,” he said. “The government should spend at least 200-300 billion baht in the third quarter.”
He said efforts to help small and medium-sized enterprises more easily access soft loans to curb the rising unemployment rate need to be sped up.
“If the economy can’t recover in the third quarter, job losses will become more severe at the end of this year,” Mr Thanavath said, adding that as many as 2 million workers could be left unemployed during the period.
He said mass layoffs will be reduced if the government allows employment on an hourly basis.
On Monday, the university forecast the economy to contract by as much as 11.4% this year, due to the pandemic impact, volatile foreign exchange, widespread drought and the continued US-China trade spat.
The forecast was based on the assumptions of the country being closed to foreigners for at least six months; a failure to disburse the 400-billion-baht budget the government set aside for economic and social rehabilitation this year; and global trade worsening by more than expected.