Consumer confidence in April rose for an 11th straight month, reaching the highest level in 38 months, helped by a reduction in Covid-19 infections, the recovery of domestic tourism and lively election campaigns nationwide.
The University of the Thai Chamber of Commerce (UTCC) reported on Thursday the consumer confidence index rose to 55 in April from 53.8 in March, 52.6 in February and 51.7 in January.
The index is below 100 points because of weak purchasing power and ongoing concerns regarding the high level of inflation and interest rates, according to the university.
Thanavath Phonvichai, president of the UTCC, said rising consumer confidence could be attributed to the government's continued economic stimulus measures, such as the "We Travel Together" hotel subsidy, which ran from March 7 to April 30, as well as state aid programmes to reduce the cost of living for people.
The tourism recovery has remained robust thanks to an increasing number of foreign arrivals after Thailand fully reopened its borders, particularly during the recent Songkran festival.
The retail prices of gasoline and diesel in the country decreased from the previous month, while the baht slightly appreciated against the US dollar, from a rate of 34.50 per dollar at the end of March to 34.28 baht per dollar at the end of April.
More importantly, he said the prices of several agricultural products improved, resulting in higher incomes for farmers and increased purchasing power in other provinces.
"Despite reaching the highest level in 38 months, the consumer confidence index has yet to recover to pre-Covid levels. This is because of ongoing concerns among consumers about the high cost of living, particularly costly electricity bills, as well as unease over the global financial situation," said Mr Thanavath.
"The economic slowdowns in the US and EU, the Russia-Ukraine conflict and increasing interest rates are all factors creating pressure on the global economy, which may lead to a recession that could impact Thai exports and purchasing power."
He said the country's economy has a good chance to grow between 3.0-3.5% this year, and there is a possibility of exceeding 3.5% if the global economy does not experience a severe slowdown.
Mr Thanavath said if the global economy does not contract, it should lead to a recovery in Thai exports.
However, if the new government lacks stability, the economy may grow by less than 3%, which could undermine consumer and investor confidence and affect the tourism industry, he said.
The university also released the TCC Confidence Index, which gauges the sentiment of the business sector and members of the Thai Chamber of Commerce in every province.
The index rose to 51.9 in April from 50.5 in March, driven mainly by a recovery in tourism and higher farm product prices.
However, most business operators remain concerned about factors that continue to undermine confidence, including the issue of PM2.5 dust, which affects the tourism industry in some regions, particularly the northern and northeastern regions. In addition, business operators are worried about the rising cost of electricity and minimum wage hikes proposed by some political parties that may affect future costs for operators.