The Consumer Confidence Index has been sliding for three straight months, dropping from 74.7 points in February to 73.5 last month. A level below 100 reflects weak consumer sentiment.

Lower consumer confidence to spend money and invest could cut growth in gross domestic product to below 3 per cent from the projection of 3-3.2 per cent this year, Thanavath Phonvichai, director of the university’s Economic and Business Forecasting Centre, said yesterday.

“With no positive factors, consumer confidence is expected to drop in the months to July, to the end of the dry season.

“As a result of weak confidence, the Kingdom’s economy could expand by less than 3 per cent this year,” he said.

To stimulate consumer confidence, the government should urgently spend on relieving the drought problem and remedy impacted farmers, as well as accelerate budget disbursement under the Bt70-billion Pracha Rath (State of People) project to local communities.

Consumer confidence could bounce back for a short time this month thanks to the government’s measure to promote domestic travel and shopping during Songkran.

However, it is still questionable whether those steps could really boost consumer confidence and spending, since people are quite worried about their future income and might prefer to save money amid the uncertainty around economic growth.

Lower confidence is really bad news for the retail industry, as consumers believe it is the worst time in four months to buy a new house and in six months to buy a new car, despite the first-home tariff-cut scheme or the recent motor show.

People also do not want to invest in or start up a business or even go anywhere, as confidence in those activities is also at its lowest level in four months.

Other factors hitting confidence last month were anxiety over global economic growth, China’s slowdown, higher domestic fuel prices, low crop prices, high cost of living, and the bombings in Belgium.

Based on 2,247 responses to its survey last month, the university found other indices reflecting consumer confidence also continuing to droop, including future incomes from 90.7 points in February to 89.5 points in March, and future employment opportunities from 69.7 to 68.8.

However, confidence in political stability improved from 88.5 to 90.4, the first rise in three months.