Thai-Cambodian dispute takes toll on consumer

The decline was due to concern over the political conflicts both inside and outside the Kingdom, the Map Ta Phut injunction and rising oil prices.

The University of the Thai Chamber of Commerce (UTCC), which compiles the data, yesterday predicted a further decline in the index until year-end.

It said major factors undermining confidence were the political dispute between Bangkok and Phnom Penh, rising oil prices and weak confidence in economic growth.

Thanavath Phonvichai, director of the UTCC's Economic and Business Forecasting Centre, said consumer confidence was particularly weak concerning the political situation and oil prices.

"The factor causing most concern is the Thai-Cambodian conflict, as it could affect the government's stability. The government must ensure the dispute does not affect trade in any major way," he said.

Thanavath said the conflict should not significantly affect commercial growth as long as the two governments maintain their policies to allow the free flow of goods between cross-border provinces.

The short-term impact could affect traders but the investment sector should not be impacted, as Cambodia still relies mainly on Thai investors, in particular in the service sector, which is a major income earner for the country.

However, consumers still have confidence in the near future, when it comes to purchasing a new car, travelling and starting a new business. This is because of promotions available towards the year-end and the government's strict control of consumer good prices, he added.

To boost consumer confidence, the government must rapidly start investment projects under the Thai Khemkhaeng programme and resolve the Map Ta Phut dispute to ensure continued economic growth, said Thanavath.

He said consumer confidence remained weak on economic recovery, as the public has not yet experienced any positive impact from the global economic rebound.

Based on a survey of 2,242 respondents, the UTCC found confidence in the overall economy had decreased from 68.4 points in September to 68 in October.

However, consumers were still optimistic about their future income, the index for which rose from 91 points to 91.2. The index on future employment opportunities increased from 78 points to 78.2 last month.