The Consumer Confidence Index (CCI) last month came in at 80.6, its lowest for 2019.
Thanavath Phonvichai, a director of the University of the Thai Chamber of Commerce’s (UTCC) Centre for Economic and Business Forecasting, said people lacked confidence after the staging of the national election last, with the outcome not known until at least May.
Another factor, said Thanavath, was that the spending by political parties during the election campaign was less than expected, due partly to politicians thinking ahead to the possibility of the polls being re-run in some electorates.
The parties’ outlays had earlier been estimated in the range of Bt30-Bt50 billion.
A decision by the Monetary Policy Committee of the Bank of Thailand to cut its forecast for economic growth to 3.8 per cent was also cited for the drop in the index. Other forecasters have cut their estimates for economic growth to below 4 per cent. The UTCC predicts expansion will be just 3.5-3.8 per cent this year.
Over March and April, the severe air pollution in the North is expected to cause economic damages of about Bt10 billion. Tourists are expected to stay away and even cancel their tour programmes and hotel bookings for the Songkran holiday. The booked occupancy rate is about 70 per cent for the Songkran period, compared with 100 per cent during the high season just finished.
“The northern provinces extending from Chiang Mai, Chiang Rai, Nan and Mae Hong Son to Lampang and Lamphun are major tourism destinations where a number of both local and foreign tourists visit. However, the dust matter has prompted many of them cancel their travel plans or hotel rooms there and change their plans to other places,” said Thanavath, referring to extreme readings for fine particulates of under 2.5 micrograms.
The centre plans to cut its estimate for this year’s economic growth after May 9, as it is waiting for a clearer political situation to emerge after the long-awaited announcement by the Election Commission. Thais will then learn who have been elected to the parliament, the political party that will lead the new government, and the new government’s policies.
The new prime minister is expected to be declared in June and the new Cabinet would be formed over August and September at the latest. Policy implementation would begin after that, Thanavath said.
The centre forecasts that the economy will expand 3.3-3.5 per cent in the first half of this year and, if there is political stability, growth of 3.7-4 per cent may be achieved in the second half.
Vichai Viratkapan, acting director of the Real Estate Information Centre, said that in regard to a recent survey on the confidence of real estate developers in Bangkok and surrounding provinces (Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon and Nakhon Pathom), the Current Situation Index in the first quarter of this year rose to 50.9, up from 50.4 in the previous quarter, on likely concerns over the impacts from the Bank of Thailand’s loan to value (LTV) measure.
The Expectations Index for the next six months was at 58.4 in the first quarter of this year, down from 60.5 in the previous quarter, reflecting developers’ positive view toward the real estate business with the likely economic expansion after the formation of the new government, he said.
Against the backdrop of political concerns, a group of renewable energy operators plans a filing to the Administrative Court for the Power Development Plan 2018 to be halted.
Britain’s troubled exit from the European Union has also pressured the Thai stock exchange, noted Krungsri Securities. The Stock Exchange of Thailand Index yesterday fell 4.84 points, or 0.29 per cent, to close at 1,644.22 points. Trading turnover was Bt34.53 billion.
