Thailand hit by slump in confidence
CONSUMER confidence has plummeted during the past six months in Bangkok, according to Asia Market Intelligence (AMI) Thailand.
In its biannual survey of consumer attitudes in the Thai capital, the market-research firm found a marked increase in pessimism among Bangkok residents, with 88 per cent not expecting a resolution to the country's economic crisis within the next six months.
The previous survey, conducted in the third quarter of last year, found 87 per cent confident of an end to the crisis within six months.
'There has been an absolutely massive loss of confidence,' AMI Thailand managing director Steve Eaton said. 'This has really opened my eyes.' The dire nature of the results was particularly compelling, he said, because Thai interviewees tended to be more optimistic when approached for market research than they were in reality.
The survey, conducted among 1,200 Bangkok residents aged 18 to 64, found an almost complete reversal of attitudes to recovery over the past six months. In the previous survey, 39 per cent were 'very confident' of an early recovery, and only 3 per cent were 'not at all confident'.
But this time, only 2 per cent were 'very confident' and 40 per cent were 'not at all confident'.
Mr Eaton attributed the pessimism to a feeling that circumstances had not changed for most people, despite repeated reports last year that the economy was on the mend.
The Thai Government unveiled a 130 billion baht (about HK$26.72 billion) economic stimulus package on Tuesday designed to increase consumer confidence and boost spending.
The package included 54.67 billion baht in tax cuts aimed at easing the burden on individuals and businesses. The cuts included a reduction in value-added tax to 7 per cent from 10 per cent for the two years to March 31, 2001, and an exemption from tax this year for the first 50,000 baht of income.
Analysts have largely welcomed the package, which will put more money in the pockets of the poorest and will create hundreds of thousands of jobs.
SG Asia Credit Bangkok office head Sriyan Pietersz said: 'The government focused the tax cuts very much on the lowest-income segments. I think it will have an effect [on spending].' Easier consumer credit had already spurred car sales, and department-store sales had begun to creep up, he said.
Economists point to a number of indicators showing the economy has bottomed out.
ABN Amro Asia Southeast Asia economist Tham Mun Hon said raw-material imports had begun to rise and retail sales were growing slightly.
He said: 'I think confidence is picking up.'