The situation of the COVID-19 pandemic's third wave, with high daily infection rates, along with delays in vaccine distribution to various provinces, has significantly contributed to a continuous decline in consumer confidence. This aligns with the results of the consumer confidence index survey conducted in May.

 

The University of the Thai Chamber of Commerce Reports Consumer Confidence Index in May Hits Record Low

                The Economic and Business Forecasting Center of the University of the Thai Chamber of Commerce revealed that the consumer confidence index for May stands at 44.7, down from 46.0 in April 2021, marking the lowest level on record. The overall economic confidence index is at 38.9, down from 40.3, while the job opportunity confidence index is at 41.3, down from 42.9, and the future income confidence index is at 53.9, down from 54.7.

               Mr. Thanawat Phonvichai, President and Advisor of the Economic and Business Forecasting Center at the University of the Thai Chamber of Commerce stated that the major negative factors affecting the consumer confidence index in May include concerns about the COVID-19 outbreak impacting the lives of citizens and businesses, and the uncertain distribution of COVID-19 vaccines.

                The National Economic and Social Development Council (NESDC) reported a GDP contraction of 2.6% in Q1 2021 and revised the GDP growth forecast for 2021 to 1.5-2.5%. Additionally, domestic oil prices have increased, there are concerns about political stability, and worries about a slowing economy leading to income not keeping pace with living costs, alongside a strengthening Thai baht.

              Positive factors include government economic stimulus measures to help revive the domestic economy, more tangible progress in vaccine distribution, the Monetary Policy Committee (MPC) maintaining the policy interest rate at 0.5%, and a 13% growth in exports in April, along with improved prices for various agricultural products.

 

The Ministry of Commerce Indicates COVID-19 Third Wave Continues to Drag Down Consumer Confidence for the Second Consecutive Month

                This is consistent with a survey by the Ministry of Commerce, where Mr. Phusit Rattanakul Serireangrit, Director of the Office of Trade Policy and Strategy stated that the overall consumer confidence index in May has decreased for the second consecutive month, both in the present and future, due to the third wave of COVID-19.

                The overall consumer confidence index for May 2021 has dropped to 41.6 from 43.5 in the previous month, reflecting a decline in consumer confidence across all sectors and professions. The current consumer confidence index has decreased from 36.4 to 34.3, while the future consumer confidence index has fallen from 48.2 to 46.5.

                When analyzed by region, all regions show a decline, particularly the central region, which saw the largest drop from 44.2 to 39.7. This is followed by Bangkok and its vicinity, which fell from 41.5 to 38.5, and the northern region, which decreased from 43.5 to 40.5.

                Analyzing by profession, all groups have seen a decline, especially among students, whose confidence dropped from 41.6 to 37.1, marking the largest decrease. The unemployed group fell from 37.2 to 36.9, representing the lowest confidence level due to the significant impact of the COVID-19 outbreak and instability in their livelihoods.

                Meanwhile, government employees decreased from 49.6 to 47.4, entrepreneurs from 43.1 to 41.2, private sector employees from 42.4 to 40.6, farmers from 44.3 to 42.6, and freelancers from 41.0 to 39.3.

                It is believed that if vaccines can be distributed and administered to the public quickly, and if the outbreak can be controlled effectively, the consumer confidence index in Thailand will gradually improve.

 

KASIKORNBANK Maintains 2021 GDP Growth Forecast at 1.8%, Monitoring Fiscal Burden, Inflation, Household Debt, and Rising Business Costs

                KASIKORN Research Center has maintained its 2021 GDP growth forecast for Thailand at 1.8%, citing ongoing uncertainties due to the pandemic both domestically and internationally, as well as vaccine distribution. However, if vaccine distribution can be accelerated sufficiently within the next 2-3 months, it could lead to a clearer economic recovery picture in Q4.

               Additionally, the government must prepare to address four key challenges: fiscal burden, inflation, household debt, and rising business costs, which complicate economic management.

                Particularly, "household debt" has worsened following the third wave of COVID-19, with vulnerable groups facing reduced income, unchanged expenses, and debt burdens exceeding 50% of their income, increasing from 10.8% during the second wave to 22.1%. The rising household debt, which is expected to reach 90% of GDP this year, will necessitate serious attention from relevant sectors after this wave of COVID-19.

                Furthermore, the increase in costs or prices of goods exacerbates the challenges for businesses, particularly SMEs, which have already been affected by reduced purchasing power and high market competition. It is estimated that a 1% increase in consumer goods prices could impact retail SMEs by approximately 23.6 to 23.8 billion baht.