Thai consumer confidence slipped for a fifth
straight month in May, a university survey showed on Thursday, as low commodity
prices and worries over the faltering economy hurt consumption.
The
consumer confidence index of the University of the Thai Chamber of Commerce
fell to 75.6 in May from 76.6 in April.
The May
reading was the lowest since June last year, when confidence was rising after a
military coup ended months of political unrest that brought the economy to the
brink of recession.
The
confidence indexes fell across the board in May, which was more worrying and
showed that consumers sensed no improvement in the economy over the past year,
Thanavath Phonvichai, an economics professor at the university, told a
briefing.
"People
don't feel that the economy will be on an uptrend over the next 3-6 months, so
they are still cautious about spending." he said.
One year
after the coup, Southeast Asia's second-largest economy is still struggling, as
its growth engines of exports and domestic demand are weak. The economy grew
only 0.9 percent last year.
Thanavath
said that as consumption will still not be a key driver of growth in
July-September, the government needs to speed up investment.
REDUCED
SPENDING POWER
Exports,
equal to more than 60 percent of gross domestic product, have been hurt by
tepid global demand and low commodity prices, which have also reduced farmers'
spending power.
Private
consumption, which accounts for half of the economy, has been curbed by high
household debt, at nearly 80 percent GDP at the end of 2014
Last
month, the state planning agency cut its 2015 GDP growth forecast by half a
point to 3.0-4.0 percent, driven by public spending, although that has been
slow off the mark so far.
The Bank
of Thailand's monetary policy committee unexpectedly cut the benchmark rate by
25 basis points to 1.50 percent in April, the second consecutive cut, to try to
spur growth.
On
Wednesday, Finance Minister Sommai Phasee said the country had no need for
further rate cuts as two recent ones were sufficient.
Following
the cuts, the baht has weakened.
The
committee next meets on June 10. Most analysts expect no policy change.
Thanavath of the university recommended another rate cut to weaken the baht to 34
to the dollar to aid exports.
Writing
by Orathai Sriring; Editing by Richard Borsuk
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated
in Singapore since 1994.
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