The consumer confidence index (CCI) in September rose for the first time in eight months as consumers are optimistic about the government’s economic stimulus measures, according to the University of the Thai Chamber of Commerce (UTCC).
Thanavath Phonvichai, president of UTCC, said the CCI increased from 50.1 in August to 50.7 in September, fuelled by positive reactions to the new cabinet ministers.
“The ‘Khon La Khrueng Plus’ co-payment scheme boosted consumer confidence, despite the Thai economy not having grown significantly. This should encourage consumer spending, reflecting the positive reception for government policies,” he said.
However, the CCI remains below 100 points, indicating that consumers see a slow economic recovery amid high living costs, said Mr Thanavath. Concerns about the trade war could potentially undermine consumer sentiment in the near term, he said.
Mr Thanavath expects improvements in the economy in the fourth quarter when the co-payment scheme becomes effective in November and December.
He said this initiative could inject 50-80 billion baht into the economy, potentially boosting GDP by 0.4-0.5 percentage points this year.
The UTCC upgraded its Thai GDP growth projection to 2% for this year, up from 1.7% previously, while predicting export growth of 6.1%, rising from 2.5%.
Private investment was revised to 1.1% growth from a projected contraction of 1.2%, and private consumption is expected to grow by 2.8%, driven by stimulus measures and increased consumption at the end of the year.
Meanwhile, several negative factors are affecting the economy, including a slowdown in tourism. Foreign tourist arrivals are projected at 33 million, down from 36 million in 2024, while tourism revenue is expected to fall from 1.69 trillion baht to 1.55 trillion.
Other factors include risks related to transshipment tariffs. Mr Thanavath said if the local content requirement is increased to 50-60%, it could lead to a decline in GDP of 0.27-0.5 percentage points within one year.
Uncertainties remain stemming from a minority government, as the anticipated dissolution of parliament within four months may make investors uneasy, he said.
Mr Thanavath said a lack of government stability could lead to a reduction in GDP of 0.75-0.9 percentage points from the baseline scenario.
In addition, fluctuations in foreign tourist numbers could affect growth. If arrivals vary from the baseline by 1 million, GDP would rise or fall by 0.25 percentage points, he said.
“It is important to monitor whether tourism and exports continue to grow, as this will determine whether Thailand’s GDP growth this year can surpass 2-2.5%,” Mr Thanavath said.
He said in addition to short-term economic fixes, the government must enhance long-term competitiveness to lift Thailand’s GDP growth to 4% in the future.
