Consumer confidence index up for first time in 13 months

Business News - Friday December 14, 2007

Consumer confidence index up for first time in 13 months

PHUSADEE ARUNMAS

Thailand's consumer confidence index in November showed an improvement for the first time after 13 months of declines, due in part to the expectations of improvements after the Dec 23 elections. The CCI last month rose to 76.2 from 75.5 in October and 70.1 in November last year, according to the monthly survey conducted by the University of the Thai Chamber of Commerce of 2,253 consumers nationwide.

Thanavath Phonvichai, director of the university's Centre for Economic and Business Forecasting, said key confidence indices, covering expectations for the overall economy, job opportunities and future income all rose, reflecting optimism about the Dec 23 election.

The confidence index in the overall economy in November rose to 69.3 from 68.6 in October, while the index on job opportunities increased to 70.3, from 69.8. The index on future income rose to 89.1 from 88.1.

Despite the improvement, the CCI remained below the norm, 100 points, for the past three years due mainly to instability in local politics.

But Mr Thanavath said he was confident that the election would help stimulate the economy. Forecasters have estimated that between 20 billion and 30 billion baht would be spent on election-related activities.

''More importantly, if the election is smooth and price of fuel is not too volatile, we could see improvement in the economy by the second quarter next year,'' he said.

The negative factors that concern him are the effects from the sub-prime mortgage problem in the United States, which could hurt demand for Thailand's exports to the world's largest economy.

Meanwhile, Dusit Nontanakorn, vice-president of the Thai Chamber of Commerce, suggested the new government spur the economy by boosting local consumption through megaproject spending in order to increase job opportunities.

Mr Dusit said he was worried that next year's exports might not grow as the government has projected, at 10% over 2007, due to weaker economies in the United States and Europe. Expensive fuel and the strong baht were also negative factors affecting exports, he said.

Bangkok Post