Consumer confidence rose for the 10th straight month in March, reaching the highest level in 37 months, boosted by the positive impact of easing Covid-19 outbreaks and the recovery of domestic tourism, which has left consumers feeling happier and more optimistic.
The University of the Thai Chamber of Commerce (UTCC) reported yesterday the consumer confidence index rose to 53.8 in March, up from 52.6 in February and 51.7 in January.
The index is below 100 points because of weak purchasing power and ongoing concerns about the high costs of living, according to the university.
Thanavath Phonvichai, president of UTCC, said the index edged up in March as consumers believe the economy is starting to recover following a clear uptick from Thai and foreign tourists, especially among Chinese visitors.
As a result, more money is circulating throughout the country and economic activities in various regions have improved, he said.
In addition, the price of oil has decreased, leading to relief for the public, said Mr Thanavath.
"Consumer confidence in March reached its highest level in three years, close to the period before the Covid-19 outbreaks. This shows people are spending more and there is a durable goods purchasing trend [such as cars]," he said.
"There is also increased spending on tourism, which will drive the Thai economy this year, both among domestic and foreign tourists visiting Thailand."
However, Mr Thanavath said consumers remain concerned about the high cost of living and the global financial situation, as well as the ongoing war between Russia and Ukraine and interest rate hikes to combat inflation throughout the world, which could further pressure the global economy into recession.
These factors had a negative impact on Thailand's exports, causing them to decline during this period and dampening consumer purchasing power in all regions, he said.
According to Mr Thanavath, increased spending is expected to be limited to middle to high-income consumers, as low-income earners making less than 20,000 baht per month are still cautious about their spending.
He said this trend is indicative of Thailand's uneven K-shaped economic recovery.
"It won't be easy for Thailand's economy to grow by more than 3.5% this year because there is an economic vacuum in the third quarter that is causing investment to hesitate. The new government's image and 2024 fiscal budget remain questions," said Mr Thanavath.
"If the global economy recovers slowly, Thailand's exports will lag, making people less willing to spend. Tourism is the only dependable sector."
He said the Thai economy is expected to grow by at least 3.3% this year.
The results of the election could have an effect on the economy, said Mr Thanavath.
If there is monetary circulation of at least 120 billion baht in the system, it will help boost the economy, he said.
