World Economy

Thai Consumer Confidence at 33-Month High

Exports reached $20 billion in October.Exports reached $20 billion in October.

The Thai consumer confidence index rose for the fourth consecutive month in November to its highest level in 33 months. The growth rested on a better than expected economic outlook in the third quarter, hefty exports and rising tourism, raising hopes for a brighter economy in 2018, says the University of the Thai Chamber of Commerce.

Thanavath Phonvichai, vice-president for research at UTCC, said the CCI rose to 78 from 76.7 in October. Bullish exports and rising tourism continue to generate additional revenue for the country at a time when the Bank of Thailand has maintained its policy rate to support the recovery, Yahoo reported.

Moreover, the National Economic and Social Development Board has revised its GDP growth forecast for 2017 to 3.9%, up from the previous forecast of 3.7%, he said.  The NESDB also reported GDP growth of 4.3% year-on-year in the July-September period—the strongest growth in 18 quarters.

Bullish exports also helped boost the CCI, rising at a double-digit clip for several months this year. Exports totaled $20.1 billion in October, up 13.1% year-on-year, while the 10-month figure reached $196 billion, up 9.7%, said the commerce ministry.

“The continued rise of the CCI, which rose for the fourth consecutive month in November, should help encourage consumers to be more confident in spending more during the year-end holiday season, supporting the economy,” said Thanavath.

He said rise in spending during the holiday season could push the economy to grow by 4.6-4.7% in the last quarter, pushing GDP growth for 2017 to 4%.

But there were some negative factors that weighed on the CCI, including falling farm prices, recent flooding, which left an economic dent in some communities, and rising oil prices that raised concerns about the cost of living, said Thanavath.

One major worry is the stronger baht, which has risen more than 9% this year to 32.5, the highest in 31 months. The robust currency is expected to affect exports as Thai products will become more expensive. “The private sector is worried 32.5-33 baht per US dollar level is too strong,” said Thanavath. “They want the Bank of Thailand to step in with some measures to help curb the baht’s rise.”

The UTCC forecasts economic growth of 4.2-4.5% in 2018.



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