However, people’s satisfaction with their current situation declined last month as lacklustre export growth led to lower incomes.

“Consumer confidence should increase continuously in the following months if there are no serious negative factors affecting political stabil?ity. However, the sub-index on [satisfaction with] the current period dropped slightly as consumers were concerned about the impacts on their current income from declining export growth,” Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre, said yesterday.

Consumers feel they still need to be cautious with their spending on durable goods and travel, particularly for purchasing a new house or new car.

The Consumer Confidence Index (CCI) for August rose to 73.2 points from 72.5 in July, echoing more positive prospects for strong economic growth, though still below the 100-point baseline.

However, consumers’ satisfaction with their current situation dropped slightly from 52.4 to 52.3 points as they worried about their incomes.

Based on the survey of 2,247 respondents, people were worried about their spending.

“Respondents said their incomes were lower because of a lack of overtime work, and lower sales from sluggish export growth. However, they were not hugely worried as there were still no signs of layoffs, but only reductions in overtime to cut costs amid declining export growth,” Thanavath said.

He said consumer confidence in the future situation had continued to grow, reflecting that consumers had high expectations for recovering exports and higher incomes in the future.

Thanavath said that with rising consumer confidence and spending, gross domestic product this quarter was projected to grow by 3-3.3 per cent, taking full-year GDP growth to 3-3.6 per cent.

Wichian Kaewsombat, assistant director of the UTCC, said other confidence indices were also more posi?tive about the economy’s growth potential.

Confidence in future income rose from 88.7 points in July to 89.7 points last month, while confidence in employment opportunity was up from 88.7 to 89.7 points. Confidence in the political situation increased to the highest figure in 18 months after the referendum approval of the draft constitution.

According to a nationwide survey by the University of the Thai Chamber of Commerce, the Consumer Confidence Index slid from 76.1 points in December to 75.5 points last month. A reading below 100 points reflects poor sentiment.

This is considered bad news for the retail sector, as consumers believe it is not a suitable time to spend money on many things including a new car or a new house, starting a new investment or travelling.

Spending during the upcoming Chinese New Year festival will grow by the smallest amount in four years at only 4.1 per cent to Bt52.56 billion, the UTCC poll found.

Last year, spending during the festival was up by 5.7 per cent to Bt50.47 billion.

“People are quite concerned about the global economy affecting the country’s growth, as there were no positive factors driving up their confidence during the past month. However, Thai consumer confidence could increase easily if the government urgently injects spending to spur economic growth through many investment projects,” Thanavath Phonvichai, director of the university’s Economic and Business Forecasting Centre, said yesterday.

Last month, lower consumer confidence was attributed to many negative factors. Beside concerns over global economic growth and international conflicts, lower expectations for Thai GDP growth also hit people’s confidence. Other factors included the continued decline in export value in December, low crop prices, particularly rubber, a weaker baht, and a perceived high cost of living.

Despite declining fuel prices, consumers were also concerned about lower purchasing power.

Thanavath said the UTCC would maintain its forecast for GDP growth of 3.5-4 per cent this year, but it could end up at the lower end of that scale.

People are also quite concerned about the impact of drought and low crop prices, which could damage confidence in the following months, he added. Last month, with many negative factors, the UTCC survey also found that other indices related to consumer confidence declined for the first time in four months. The confidence in future employment opportunity dropped from 70.9 points in December to 70.3 in January, and confidence over future income decreased from 92.4 to 91.7. Confidence in the political situation was also lower, dropping from 94.2 to 91.7 points.