Consumer Confidence Index Drops To 5-year Low In February

[george]

Consumer confidence index drops to 5-year low in February

BANGKOK: -- The consumer confidence index in all categories declined to a five-year low in February, dampened by political woes, New Year’s bombings in Bangkok and escalating violence in the deep South, according to the University of Thai Chamber of Commerce.

Saovanee Thairungrueng, Deputy Rector of UTCC, said a survey on confidence in the Thai economy in February found the consumer confidence index dropped to 79 points from 79.99.

The current and future confidence indexes declined to 76.8 and 77.1 from 77.7 and 78. So did the confidence index for overall economy, job opportunities, and future incomes, which dropped to 73.4, 74.4, and 89.2 from 74.2, 75.4, and 90.2, respectively.

She said the index in all categories plunged to a five-year low due to many negative factors. Included are a further oil price rise, a lack of political stability following a resignation of Pridiyathorn Devakula as deputy prime minister and finance minister, a resignation of Somkid Jatusripitak as the chairman of a committee tasked to explain the sufficiency economy philosophy to foreign communities, fears of possible bombings in Bangkok, and continuing southern unrest.

As well, the Finance Ministry’s downward revision of the economic growth estimate for this year, the further baht appreciation, and higher living costs of people had undermined consumers’ confidence.

A reduction in the one-day repurchase rate by 25 basis points and lending rate by the same rate is only a positive factor that helped investment sentiment in the stock market and made the baht weaken slightly.

Thanawat Polvichai, Director of the UTCC’s Economic and Business Forecasting Centre, said the survey indicated a marked decline in the consumer confidence index, which is of grave concern.

He suggested the government step up efforts to stimulate the economy through fiscal and monetary measures by accelerating a disbursement of the fiscal budget to boost employment, reducing key interest rates by 0.50 per cent by the second quarter of this year, and easing the 30 per cent reserve requirement to restore foreign investor confidence.

--TNA 2007-03-09

[Martin]

As Thaksin's credit-led boom boosted consumer confidence to dangerously high levels, it is a good thing that it is reducing, albeit only slightly.

A good indicator of ther excessive consumer confidence of the past few years is the high rate of re-possession of cars that is happening. New lots trying to sell them secondhand seem to spring up almost daily.

America is going to get hit hard by the deflation of the bubble created by consumers buying stuff they don't need with money they haven't got. That will have knock-on effects for all countries with an industrial sector. So the more frugal that Thais have been in spending their money, the better-off they will be.

Of course, the Chamber of Commerce man speaks as he does. He would, wouldn't he?

Bookies never point out that it is they and not the punters who get rich, do they?

[Mid]

a 5 yr low is slight .............who would have guessed

[thaigene2]

As Thaksin's credit-led boom boosted consumer confidence to dangerously high levels, it is a good thing that it is reducing, albeit only slightly.

A good indicator of ther excessive consumer confidence of the past few years is the high rate of re-possession of cars that is happening. New lots trying to sell them secondhand seem to spring up almost daily.

America is going to get hit hard by the deflation of the bubble created by consumers buying stuff they don't need with money they haven't got. That will have knock-on effects for all countries with an industrial sector. So the more frugal that Thais have been in spending their money, the better-off they will be.

Of course, the Chamber of Commerce man speaks as he does. He would, wouldn't he?

Bookies never point out that it is they and not the punters who get rich, do they?

Yes couldn't agree more. I get a kick (rather sadly) by these 'business news' reports that try to avoid mentioning the 800-pound gorilla in the room. Why, it couldn;t possibly be because of a decline in INTERNATIONAL buyer sentiment could it?

No it's Thai oil rpices, or thai rice prices or some other goofy distraction. Nobody's buying thai conods or houses either becuase of "fears of the trouble in the south" or "economic uncertanity with ya-da-yda-da" B+ll sh+t.

No foreign investment - period - except sanction BOI is your answer. And as you point out - the party's over in America. get used to it everyone.

Oh no.....here comes the property guys and the 'consumer market will nerver crash guys'..

whatever.

[wpcoe]

Yes couldn't agree more. I get a kick (rather sadly) by these 'business news' reports that try to avoid mentioning the 800-pound gorilla in the room. Why, it couldn;t possibly be because of a decline in INTERNATIONAL buyer sentiment could it?

No it's Thai oil rpices, or thai rice prices or some other goofy distraction. Nobody's buying thai conods or houses either becuase of "fears of the trouble in the south" or "economic uncertanity with ya-da-yda-da" B+ll sh+t.

No foreign investment - period - except sanction BOI is your answer. And as you point out - the party's over in America. get used to it everyone.

Oh no.....here comes the property guys and the 'consumer market will nerver crash guys'..

whatever.

And yet, somehow, the baht continues to get stronger and stronger. Why is that?

[lost_in_space]

Yes couldn't agree more. I get a kick (rather sadly) by these 'business news' reports that try to avoid mentioning the 800-pound gorilla in the room. Why, it couldn;t possibly be because of a decline in INTERNATIONAL buyer sentiment could it?

No it's Thai oil rpices, or thai rice prices or some other goofy distraction. Nobody's buying thai conods or houses either becuase of "fears of the trouble in the south" or "economic uncertanity with ya-da-yda-da" B+ll sh+t.

No foreign investment - period - except sanction BOI is your answer. And as you point out - the party's over in America. get used to it everyone.

Oh no.....here comes the property guys and the 'consumer market will nerver crash guys'..

whatever.

And yet, somehow, the baht continues to get stronger and stronger. Why is that?

I know the baht is getting stronger to the dollar, my currency. No surprise there, considering the size of the US debt, economic mismanagement, etc. Is it getting stronger compared to the Euro, or other currencies?

[bingobongo]

i guess reality is a bitch........even in LOS

Thais lose their smile

The level of national happiness continues to decline, according to the latest survey by Abac Poll.

"What's worrying is that foreigners living in Thailand are less happy, too," said Abac director Dr Noppadon Kannika.

http://www.nationmultimedia.com/2007/03/12...al_30029037.php

Edited March 11, 2007 by bingobongo

[Naam]

"I know the baht is getting stronger to the dollar, my currency. No surprise there, considering the size of the US debt, economic mismanagement, etc. Is it getting stronger compared to the Euro, or other currencies?"

*****

THB strengthened versus all major currencies.

[The Skipper]

Thaksin wasn't perfect but he is looking better every day.

[Heng]

Cool, shorter lines.

[thaigene2]

Yes couldn't agree more. I get a kick (rather sadly) by these 'business news' reports that try to avoid mentioning the 800-pound gorilla in the room. Why, it couldn;t possibly be because of a decline in INTERNATIONAL buyer sentiment could it?

No it's Thai oil rpices, or thai rice prices or some other goofy distraction. Nobody's buying thai conods or houses either becuase of "fears of the trouble in the south" or "economic uncertanity with ya-da-yda-da" B+ll sh+t.

No foreign investment - period - except sanction BOI is your answer. And as you point out - the party's over in America. get used to it everyone.

Oh no.....here comes the property guys and the 'consumer market will nerver crash guys'..

whatever.

And yet, somehow, the baht continues to get stronger and stronger. Why is that?

I know the baht is getting stronger to the dollar, my currency. No surprise there, considering the size of the US debt, economic mismanagement, etc. Is it getting stronger compared to the Euro, or other currencies?

Well it's a good point and one that somebody else raised in a letter to the editor of the Bangkok Post the other day. Why IS the baht continuing to rise (and no longer just against the US dollar - check out the most recent rates - it's now stregthening against all major Western currencies. Something is going on - but I seriously doubt it is 'confidence' in Thailand's mid-term future..More like currency manipulation if you ask me. Is this a reverse attack on the Baht (reverse of 97 but with the same intentions - to make money out of forcing the BOT to intervene?)

[jetjock]

I don't think this latest news is going to help the Consumer Confidence if Thailand winds up on the US special watch list which could affect its export market.

BREAKING NEWS March 12, 2007

US may list Thailand as a top IP pirate

(TNA) – The United States is poised to place Thailand on its special watch list next month, as industry pressure groups claim the country is one of the the most rampant pirates of intellectual property.

Puangrat Assawapisit, Director-General of the Intellectual Property Department, revealed that five private-sector groups including music and movie, clothes, pharmaceuticals, cable television and books, out of 13 groups in the US complained that Thailand failed to ease problems on continuing intellectual property piracy in various forms.

Worse still, rather than limiting, or containing existing piracy, the groups concluded that the practice appeared to be growing worse in Thailand, and is becoming rampant.

There is a mounting concern Thailand might be put on a US special watch list instead of the watch list which it is placed at present, Mrs. Puangrat said, adding that the department would coordinate with agencies concerned this month to accelerate explaining to the US that Thailand had not been indifferent in coping with intellectual property piracy.

"At present, many groups of Thai producers are worried that the US will place Thailand in its special watch list instead of a watch list for its failure to address the intellectual property piracy.

"Should Thailand be really placed on the US special watch list, the generalised system of preferences the US just renewed for Thailand may be revised," she said.

"Now, no one can tell that whether the US will put Thailand on its special watch list. But if Thailand is really placed on the list, many Thai export products shipped to the US will be hard hit."

Earlier this year, Mrs. Puangrat said, the department had submitted a written clarification contesting what American authorities call Thailand's failure to cope efficiently with intellectual property piracy to the US Embassy in Bangkok.

It had also accelerated sending all relevant information to clarify doubts to the US government since it believed the prevention and suppression of intellectual property piracy in various forms, particularly copied tapes and compact discs, had been done quite efficiently in the past five or six years, she said.

[andook]

Doesn't seem like the Baht is riding high due to any sound economic principles, political stability, or investor confidence.

When it does go South, its going all the way.

[Martin]

I don't suppose we will ever know why the speculators thought that the baht was going to go up relative to US dollar, pound, euro and yen. But clapping on the 30% withold kept the threatened big inflow out (and I read that other countries with relatively small currencies have also done this to make the speculators sod off).

There is now a lot of worry that the US dollar and the sterling pound and euro are going to take a hammering as the yen carry trade unwinds, and that will make their imports a lot more expensive and start recession.

Exactly what may happen is quite unclear, but worldwide volatility is almost certain.

Edited March 12, 2007 by Martin

[Plus]

The market might be wrong but no one has enough reserves to prove it (wait out).

In retrospect even 30% rule might be viewed as beneficial if speculation on Thai baht continues unabated.

[slimdog]

Regarding the 30% rule:

I wonder how much this might have in effecting currency outflows. Currencies generally ebb and flow depending on some basic economic principles; stock market, bond market, current exchange rates, interest rates etc. If the speculators feel that the stock market is undervalued, or that bonds are worth the investment, they may be feeling that it is better to keep the money in Thailand rather than repatriate it as they would have the 30% withholding tax should they wish to bring the money back in at some time in the future. Hence the need for the BOT to issue 1.4 trillion in bonds in 4 months (mostly at fixed rates). So few people are selling their bahts.

Obviously exportors are quickly selling their overseas earnings and buying baht, as they fear that their profits could be undermined if they wait, and the baht continues rising.

It just seems that maybe, the BOT have put in a flow valve when there was perhaps a little too much money in the market in the first place.

Just a thought...