More than 60 per cent of the 2,244 respondents to last month's survey believed it was not a suitable time for travelling, starting new investments, or purchasing luxury goods or properties.

"Consumers will reduce their purchasing while manufacturers will slow down their new investment. This will drag this year's economic growth down to only 3.8 per cent to 4.3 per cent," said Thanawat Polvichai, director of the Economic and Business Forecast Centre at the University of the Thai Chamber of Commerce.

The centre predicts the overall index will continue to drop until the beginning of next year because of the country's political disorder, in particular.

Last month, the centre predicted the index would recover in the fourth quarter of this year, but it now foresees the political situation worsening.

However, it will closely monitor this month's economic figures in order to project the country's outlook for the remainder of the year.

The consumer confidence index has dropped for 24 consecutive months, from June 2004 to June this year.

Whenever it is below 100 points, it indicates a level of economic pessimism. Last month's figure was only 0.2 of a point above its worst-ever level of 79.8 points in April 2002.

The centre said tumbling consumer confidence has directly affected other economic indexes, which have also fallen to their lowest levels in four to five years.

The index for overall confidence in economic conditions fell to 75.2 points from 75.5 in May. Another for confidence in new employment possibilities fell to 76.3 points and that for confidence in future income fell to 91.3 points.

In June, public feeling about the country's current situation registered 78.5 points, an increase from 77.6 in May thanks to the national celebration for the 60th anniversary of His Majesty the King's accession to the throne, and the World Cup.

However, consumers' confidence in their future lost ground, from 80.4 points in May to 79.1 in June.

Thanawat said renewed Bangkok protests by the People's Alliance for Democracy should not cause deterioration in overall economic conditions in the short term because the economy is already on a downward trend.

However, the protests may have a direct effect on inbound tourists and foreign direct investment.

Of those surveyed, 33.8 per cent believed the economy would continue to slow down, 61.1 per cent had faith that there would be no further change and the remaining 5.1 per cent foresaw better economic conditions within six months.

The main negative factor was the prediction that oil prices would reach US$75 per barrel in the third quarter and as high as $80 in the fourth quarter.

The survey found that the loss of consumer confidence was reflected in declining car and house purchases.

Consumers have also dropped travelling plans and small and medium-sized enterprises have suspended plans for new investments.

To help boost consumer confidence, Thanawat said the caretaker government should stabilise the value of the baht to protect the export sector, which was the country's main economic hope, as well as promoting more tourism and accelerating budget disbursements.

Meanwhile, the Economic and Business Forecast Centre's survey found that its index for the gross domestic happiness (GDH) of consumers increased in June, but it said the figure would fall again because people are concerned about rising costs of living.

Confidence in the country's cost of living tumbled from 48.3 points in May to 45.2 in June, and confidence in the politic situation was a meagre 24 points, after falling from 24.4 points in the previous month.

Ninety-three per cent of respondents said rising oil prices were their biggest concern. The country's political situation followed in second place.

Petchanet Pratruangkrai

The Nation