Consumer Confidence Crashes! Threat of Political Chaos and Rising Living Costs Shakes Thailand’s Economy – Is An Uprising Next?

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Following an almost consistent rise since April 2021, the Consumer Confidence Index (CCI) took a fall in July, recording a dip to 55.6 from the prior month’s figure of 56.7. The revelation of this slight downtrend was announced by the University of the Thai Chamber of Commerce (UTCC)’s Economic and Business Forecasting Centre, an authoritative source that reveals the economic networking insights.

The primary cause triggering this decline, as stated by UTCC president Thanawat Phonwichai, is the growing consumer apprehension concerning political ambiguity in assembling the government. The worry has been festering for almost a quarter since the last general elections. Furthermore, consumers are experiencing bouts of anxiety due to the escalating cost of lifestyle, with electricity bills ringing a special alarm.

Pandemic-induced economic halt at the global level, coupled with international disputes, also contributed to these rising worries. Compounding the fear are the recent interest rate increases by foreign central banks in a move to control inflation, a ripple effect of which has also been felt in Thailand, particularly in the export sector.

Moving on to various economic facets, the Forecasting Centre disclosed its findings, which highlighted a slight dip in July’s overall economic situation confidence index from June’s 51.2 to 50.3. Along similar lines, the employment opportunities confidence index also saw a drop from 53.7 to 52.7. Moreover, the confidence index for future income fell from June’s 65.1 to 63.9 in July.

As Thanawat highlighted, “The all-round drop in these indexes underscores consumers’ worry over economic instability which they fear might take a toll on their professional lives and earnings, extending beyond just industries.” The commotion created by the delay in forming the government has already drained the Thai economy of 50-80 billion baht, given the reluctance of the public and various businesses to spend amidst such uncertain times.

However, the Forecasting Centre maintained a silver lining breather. The centre predicts that if the political situation finds a definitive resolution by this month or by the arrival of September, the CCI might see a rebound. This, however, hinges largely on how positively the consumers view the economic policies laid down by the new government.