BANGKOK, Thailand – Consumer confidence in Thailand fell for a third consecutive month in May, reaching its lowest level in 42 months as concerns over Middle East tensions and high energy prices continued to weigh on public sentiment, according to the University of the Thai Chamber of Commerce (UTCC). Thanavath Phonvichai, president adviser to the UTCC’s Center for Economic and Business Forecasting and rector of the university, said the Consumer Confidence Index dropped to 49.5 in May from 50.6 in April. The figure marks the lowest reading since December 2022. The decline was attributed largely to consumer concerns about the ongoing conflict involving the United States, Israel, and Iran, as well as persistently high oil prices that could affect economic growth and increase living costs.
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Consumers remain cautious about spending during the first half of the year while awaiting greater clarity on developments in the Middle East, government measures to ease the impact of higher energy costs, and the effectiveness of economic stimulus programs. Among the index components, confidence in the overall economy stood at 43.1, confidence in employment opportunities was 47.5, and confidence in future income was 57.9. Thanavath said June will be an important month in determining whether confidence begins to recover as the government starts injecting funds into the economy through the “Thai Help Thai Plus” program. The scheme is expected to generate between 200 billion and 250 billion baht in economic activity from June through September, averaging around 50 billion to 60 billion baht per month, with much of the spending expected to benefit grassroots communities and small and medium-sized enterprises (SMEs).
Despite the weak confidence figures, Thanavath argued that Thailand’s economy has likely already passed its lowest point. He pointed to improving GDP growth, which rose from 1.2% in the third quarter of last year to 2.5% in the fourth quarter and 2.8% in the first quarter of 2026.
His assessment broadly aligns with the forecast of Thailand’s Joint Standing Committee on Commerce, Industry and Banking, which expects economic growth of 1.6% to 2.0% this year. The university, however, believes growth could reach 2.0% to 2.5% if geopolitical tensions ease and government stimulus measures prove effective. There were also signs of improvement in the agricultural sector. Prices for several key commodities, including rubber, palm oil, cassava, jasmine rice, and feed corn, have risen in line with global oil prices, potentially boosting farm incomes and purchasing power.
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Tourism, however, has yet to fully recover due to global economic challenges and high airfares, although the sector appears to be stabilizing and gradually improving. Thanavath noted that Thailand’s recovery continues to display a “K-shaped” pattern. Export-oriented industries, artificial intelligence, and information technology businesses are performing well, while many SMEs continue to face pressure from weak consumer spending and rising operating costs. The survey also showed that the Thai Chamber of Commerce Confidence Index fell from 42.2 in April to 41.7 in May, marking a third consecutive monthly decline. Businesses cited concerns over prolonged geopolitical conflicts, rising diesel prices, increasing production costs, and air pollution from PM2.5 dust.
Employment confidence recorded the sharpest decline among business indicators, reflecting concerns about hiring slowdowns and limited layoffs aimed at controlling costs. However, Thanavath emphasized that Thailand’s unemployment rate remains low at around 1%, equivalent to roughly 400,000 people, indicating that the country remains close to full employment. He added that the “Thai Help Thai Plus” program should help support employment levels and business activity, while calling on the government to introduce additional measures to assist businesses. These include keeping energy and electricity costs under control, expanding access to low-interest loans through state financial institutions, and easing debt restructuring requirements to help firms maintain liquidity during a still-fragile recovery. (TNA)
