BANGKOK — Thailand’s consumer confidence hit its lowest point in 11 months this July, marking the fifth consecutive month of decline amid growing concerns over political instability.
On August 6, Thanavath Phonvichai, President of the University of the Thai Chamber of Commerce and Chief Advisor of the Center for Economic and Business Forecasting, announced the results of the July 2024 Consumer Confidence Index survey.
The index decreased from 58.9 to 57.7, marking the fifth consecutive month of decline and reaching its lowest level in 11 months since September 2023.
Consumers are concerned about potential political instability in Thailand due to future Constitutional Court rulings regarding the dissolution of the Move Forward Party and the case determining whether the Prime Minister’s ministerial status should end.
“People are worried that Thai politics may lack stability in the future. The possible dissolution of the Move Forward Party is not expected to significantly impact the economic system. However, if a political accident occurs requiring a change in Prime Minister, it could create a political vacuum for about 4 months, affecting the country’s overall economic management. This could potentially reduce Thailand’s economic growth by 0.3% this year, with the whole year possibly expanding by only 2%,” Thanavath said.
Consumers also view that the Thai economy is starting to trend downward because budget disbursement is still low. There’s a risk that this year’s GDP growth could be lower than 2.5% if the government doesn’t implement clear economic stimulus measures. Additionally, the global economy is fragile due to the U.S. economic slowdown and rising unemployment rates, as evidenced by significant drops in global stock markets, especially in Asia, which fell by up to 5%.
The survey indicates that consumers perceive a slow economic recovery due to the lack of clear economic stimulus measures, rising energy prices (especially gasoline), concerns about the prolonged war in the Middle East, and the fragile global economy due to the U.S. economic slowdown.
Regarding the government’s 10,000 baht digital wallet stimulus measure, it’s expected to proceed normally, with spending likely to begin from December 2024. It’s anticipated that 80% of eligible citizens will use the funds immediately in the first month, injecting 200-250 billion baht into the economic system.
The spending over the first three months, extending to January and February 2025, is expected to circulate a total of 300-400 billion baht in the system, potentially boosting Thailand’s economic growth this year by 0.5-0.7%.
This could increase the overall growth rate to 2.6-2.8%, higher than the previous forecast of 2.4-2.6%.
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