Consumer confidence fell to a 10-month low in September - reflecting ongoing domestic political turmoil and the world's worsening financial crisis - and the index is now expected to continue its slide over the rest of the year.From 77.7 in August, the consumer confidence index (CCI) has now declined to 76.8, according to the latest survey by the University of the Thai Chamber of Commerce (UTCC).
An Internet cafe near Rajabhat Chankasem University stands closed following Tuesday’s violent clashes between police forces and anti-government protesters under the People’s Alliance for Democracy. PHRAKRIT JUNTAWONG
This puts the index, which is based on a nationwide survey of 2,255 respondents, at its lowest level since December last year.
The CCI combines indices measuring sentiment on the economy, job opportunities and future income. Although a score of 100 is the norm, the index has now been below 100 for 51 months.
In September all three key indices fell - for the overall economy from 70.5 to 69.5; for job opportunities from 70.9 to 70.3; for future income from 91.7 to 90.06.
"Consumers' concerns over the political situation are mounting," said UTCC economist Thanavath Phonvichai. "They are all afraid it will eventually affect the overall economy, along with the impact from the US financial crisis."
Mr Thanavath added that the confidence index in the current situation also slipped to 69.1 in September, the lowest in 71 months since November 2002. He said consumer confidence was expected to slip again in the October survey, after violent clashes between police and anti-government protesters on Tuesday.
"We believe sentiment will improve if political tensions ease, but if the situation becomes more violent, the confidence of consumers will definitely deteriorate further," said Mr Thanavath.
"On top of that, we expect bearish economic activity, shrinking purchasing power, lower profits and sales in the business sector and lower capital inflows in the economic system."
He suggested that the government should prioritise finding ways to stimulate the economy over the rest of this year and the coming year.
"The 700,000 new university graduates will be hardest hit, while unskilled labourers are highly likely to face unemployment. Business sectors most liable to see layoffs are property, construction, automobiles, luxury goods, and gems and jewellery," he said.
source bangkok post
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