BANGKOK, June 10 (Reuters) – Consumer confidence in Thailand rose in May as tension eased after the end of disruptive political protests in the capital, with strong GDP data released during the month also providing a boost.
The consumer confidence index from the University of the Thai Chamber of Commerce rose to 67.6 in May after plunging a record 2.6 points to 67.2 in April because of political violence. April’s reading was the lowest since July 2009.
“Confidence rose for the first time in four months as the political situation eased. It is really because of the story of hope,” university economist Thanavath Phonvichai told a news conference on Thursday.
The government has announced a reconciliation plan and Prime Minister Abhisit Vejjajiva is due to unveil details later on Thursday.
The protesters were mainly poorer Thais, supporters of former Prime Minister Thaksin Shinawatra who was ousted in a military coup in 2006.
The survey was conducted after the May 19 crackdown by the military that ended nine weeks of unrest. In contrast, the April poll was conducted after deadly clashes between troops and protesters on April 10, after which tension escalated.
Confidence in May was also boosted by strong economic growth in the first quarter of 2010. Data on May 24 showed GDP grew 3.8 percent from the previous quarter and 12 percent from a year before, when Thailand was going through a brief recession.
However, the unrest has hit tourism and consumption, and some economists said the economy could contract in April-June from the first quarter. [ID:nSGE657032]
DEAD AND INJURED
Confidence hit a 21-month high of 71.9 in January as the economy recovered but then slipped as political tension built up. More than 89 people were killed during the anti-government protests from mid-March and nearly 2,000 injured.
Sentiment should improve as long as the political situation remains calm, the university said, adding an index that projects confidence over the next six months also rose for the first time in four months in May, reaching 74.1 after 73.0 in April.
“The higher index shows that consumers are feeling better now the protest is over,” said Thammarat Kittisiripat, an economist at Tisco Securities.
“That should help boost spending. Although the outlook for the political problem is not clear yet, I still believe that our economic fundamentals remain strong,” he added.
Life in the capital is back to normal three weeks after the crackdown, and the government has announced relief measures to help firms and small operators hit by the violence.
Several countries, including Britain and Australia, have eased their travel warnings for Thailand, which should help bring back tourists over time. Tourism accounts for 6 percent of GDP and employs at least 15 percent of the workforce.
Prime Minister Abhisit Vejjajiva remains optimistic that economic growth could be close to 6 percent this year. [ID:nSGE65501I]. The state planning agency, the NESDB, which compiles GDP data, forecasts 3.5 to 4.5 percent. ($32.62 Baht) (Additional reporting by Arada Kultawanich; Editing by Alan Raybould)