Special Report: Consumer confidence rises as Thai economy recovers

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The Thai economy is starting to pick up and consumer confidence is improving because of clear political directions, since the political situation in Thailand has returned to normal.

According to the Bank of Thailand, the Thai economy dropped to a low point in the second quarter and is now gradually recovering.

Apart from a clear political direction, economic stimulation measures have accelerated domestic spending. As a result, the Thai economy in the second half of 2014 is likely to grow, and this should improve the confidence of the general public and investors.

Meanwhile, Head of the National Council for Peace and Order General Prayuth Chan-ocha stated that the overall consumer confidence level continues to improve. The industry confidence index in June 2014 rose to 88.4 from 85.1 in May, as the overall business operation became more convenient and flexible. Purchase orders in many industries, such as those concerning garments, sportswear, and sports shoes, have increased.

He said that investment has shown a clear sign of improvement. A total of 634 projects applied for investment promotion from the Board of Investment (BOI) in the first half of 2014, with a total value of 337.4 billion baht. The number of projects applying for investment promotion has increased steadily. In June, the number of projects reached its highest point in six months, which signals increasing confidence among investors. It is expected that the investment value for 2014 will achieve the set target of 700 billion baht.

The BOI has recently approved 15 projects worth around 51.5 billion baht. Most of them involve manufacturing industries, notably eco-car production. Eco cars will be important in the future as they are affordable and easy to maintain.

Regarding the automobile industry, General Prayuth said that the production of automobiles has decreased, as a result of the first-car tax rebate scheme, which created false demand. When the scheme was suspended, the turnover subsequently declined and led to the current problem, which needs to be resolved.

Exports in June increased, compared with the same period of 2013 and May 2014. The export value in June 2014 came to 19.8 billion US dollars, an increase of 3.9 percent after a steady decline during the previous three months. The increase was seen in several sectors, such as manufacturing, agriculture, and agro-industry.

The Fiscal Policy Office estimated that the export value for the whole year would increase by 1.5 percent. The Office of the National Economic and Social Development Board expected that the export value would rise by 2 per cent. These figures, however, are only estimation and can fluctuate, as they also depend on external economic factors.