Thais buoyant as oil prices slide

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Thais buoyant as oil prices slide
PETCHANET PRATRUANGKRAI
THE NATION

BANGKOK: -- THAIS ARE BECOMING upbeat about the economy this year, as plummeting oil prices are leaving more baht in their pockets to splurge, especially on big-ticket items.

"Thai consumers have higher confidence because of lower fuel prices. Since oil prices started to decline in June, Thailand could save up to Bt10 billion a month. Consumers now have greater confidence to spend more on other things," Thanavath Phonvichai, director of the Economic and Business Forecasting Centre at the University of the Thai Chamber of Commerce, said yesterday.

The university's Consumer Confidence Index improved from 79.4 points in November to 81.1 in December - the highest in one and a half years since July 2013.

The rise was attributed to lower oil prices in the global and domestic markets, policy-makers' steady course on the benchmark interest rate and the cooperation of the private sector with the government to cut consumer-goods prices temporarily during the New Year's celebration.

With lower expenses for energy, people will have more money to spend on other things. Domestic spending will be one of the key engines of growth this year.

The university's survey of 2,241 consumers found that they feel better about purchasing a new car or house, travelling and starting an investment.

The index for a suitable period to buy a new car turned up last month to 102.3 points for the first time in four months and stayed above 100 points, the neutral baseline.

Oil in the global market could slide to US$40 per barrel in the first half of the year, so the domestic oil price could sink further by Bt2 per litre.

Although confidence is on the rise, consumers hold lofty expectations for future economic growth, so the government will need to accelerate disbursement of the state budget and reverse the slide of agricultural prices very quickly. The global oil-price trend could affect the prices of agricultural crops, mainly rubber, which will continue to be the government's challenge to solve this year.

Other risks are uncertain global economic growth, particularly in Russia, sagging stock-market indices and continued high prices of goods and cost of living.

GDP expansion

With reviving consumer sentiment, as well as the government's stimulation of the economy through investment, gross domestic product is forecast to expand by 2.5-3 per cent in the first half of the year, then pick up the pace to 4.5-5 per cent in the second half.

Cheaper oil will keep inflation down to about 1.5 per cent this year, while monetary policy is expected to keep its status quo, Thanavath said.

Wachira Kuntaweethep, assistant director of the centre, said confidence in employment opportunities advanced from 73.1 points to 74.6 last month, while confidence in future incomes gained momentum from 96.3 to 98.3.

Confidence in the political situation jumped last month to above the 100-point mark for the first time in nine years, at 100.1 points, showing that consumers have a slightly positive outlook on the current circumstances.

Source: http://www.nationmultimedia.com/business/Thais-buoyant-as-oil-prices-slide-30251434.html

-- The Nation 2015-01-08

[JeremyBowskill]

Yup, nothing like a deepening global recession to put a smile on peoples faces.

[ratcatcher]

After splurging, hopefully some will have enough left over to pay their debts?

[LawrenceChee]

After splurging, hopefully some will have enough left over to pay their debts?

Or buy that snazzy iPhone or Samsung ....heck with money left from the motor refills maybe they will even get that new Exlim selfie camera which every hi so gal has for about 45,000 baht !

[Caveat Emptor]

Over the New Year holiday i drove a round trip in excess of 1,300 Kms and when filling up for both legs saved on my diesel but enough to ' splurge on a big ticket item ' ?

Most definitely not !

[thesetat2013]

Why wouldn't the Thais have higher confidence. The oil prices keep dropping but the Thais don't reduce what they charge. More profit would make anyone have confidence.

[konying]

Yes a 20 baht saving on fuel of tank for a bike is enough to splurge for luxury items

[noitom]

Thais are "buoyant." Boy oh boy is that an understatement. The Thai press is so filled with hot air and gas, they are in a constant state of buoyancy.

[jayboy]

Actually the slump in the oil price is excellent news for the Thai economy and in my view will also have political implications.It will enhance the position of the present government since a stagnant economy was one its greatest threats.This is an unexpected lifeline for the Junta.

[ToddinChonburi]

so you save 2 baht per gallon, WHAO DOGGIE HANG ON !!!!!!!!

[LawrenceChee]

Actually the slump in the oil price is excellent news for the Thai economy and in my view will also have political implications.It will enhance the position of the present government since a stagnant economy was one its greatest threats.This is an unexpected lifeline for the Junta.

That plus the potential Chinese projects coming in may actually mean good news for some ....not all Thais some ....

[Jonmarleesco]

Perhaps the government should slash the import duty on cars - and double, or even triple, the petrol tax.

[rickirs]

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Actually the slump in the oil price is excellent news for the Thai economy and in my view will also have political implications.It will enhance the position of the present government since a stagnant economy was one its greatest threats.This is an unexpected lifeline for the Junta.

Yes and no. Thailand's offshore undeveloped oil & gas reserves just lost half their value and perhaps no longer economic for development. Alternative energy projects will be shelved with even greater reliance on imported LNG and coal. Crash of the Russian ruble will just about snuff any signficant food imports from Thailand. The Thai baht may inflate relative to the yuan to make chinese goods and services more expensive for Thailand. The price for rubber may begin another crash. The government may perceive the economy no longer needs a stimulus and cease its investment plans which it was altready hesitant to implement.