Flooding impacts consumer confidence in August

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BANGKOK, Sept 8 – Thailand’s Consumer Confidence Index (CCI) in August dropped to 73.8 from 74.4 in the previous month, the first decline in four months, thanks to severe flooding in the North and Northeast, according to a survey released on Thursday.

The drop in consumer confidence was attributed to the extensive damage to property and crops in the flood-stricken areas.

In addition, other negative factors affecting consumer confidence include concerns among consumers about the rising cost of living and goods at rates much faster than their incomes, according to a survey conducted by the University of Thai Chamber of Commerce (UTCC) Economics and Business Forecasting Centre.

The confidence index on job opportunities for the month fell to 74.4 from 74.9 in July. Consumer confidence regarding future income dropped from 102.1 to 102.8, the centre said.

Both consumers and businesses are feeling less confident as they remain uncertain on how the Pheu Thai-led government of Prime Minister Yingluck Shinawatra will translate its policy into action.

The latest forecast of Thailand’s National Economic and Social Development Board (NESDB) which revised downward the country’ gross domestic product (GDP) in 2011 to 3.5-4 per cent from its earlier forecast in a range between 3.5-4.5 per cent also dampened confidence among consumers who fear that the economy is growing at a slower pace against the backdrop of key interest rate hikes by the central bank.

Concerns over the fragile global economic recovery, in particular the eurozone debt crisis and the US public debt crisis, also helped drive consumer confidence down.

The survey shows, however, public confidence in the Thai economy, nonetheless stood above 100, indicating that the situation is not worrisome, according to the centre.