The Thai Consumer Confidence Index has been sliding for four straight months, dropping from 73.5 points in March to 72.7 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 in the first half to only 2.8 per cent and result in full-year growth of 3-3.5 per cent,” 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. Spending sentiment will also drop along with weak confidence as people are concerned about their incomes and employment, he added.

The drought is expected to cause losses of about Bt120 billion to the economy.

To stimulate consumer confidence, the government should urgently spend on relieving the drought problem and remedy impacted farmers, as well as accelerate budget disbursement to local communities, the centre says.

Low confidence is fairly bad news for the retail industry, while consumers believe it is the worst time in six months to buy a new house and the worst in almost seven years to buy a new car.

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 six months.

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

Based on 2,247 responses to its survey last month, the university found other indices reflecting consumer confidence also continuing to drop, including future incomes, from 89.5 points in March to 88.5 in April, and future employment opportunities, from 68.8 to 68.

However, confidence in political stability improved from 90.4 to 91.9.