Thailand’s consumer confidence index has plunged for the sixth consecutive month in July, reaching its lowest level in 31 months, according to a nationwide survey released Thursday by the University of the Thai Chamber of Commerce (UTCC).
Key takeaways
- Thailand’s consumer confidence index dropped to a 31-month low in July amid fears of economic stagnation and high living costs.
- Uncertainty over U.S. tariffs and unclear transshipment rules are adding pressure on Thai trade and business sentiment.
- Political instability, including the suspension of Prime Minister Paetongtarn, has further eroded consumer trust and economic outlook.
The decline is driven by deepening concerns over the sluggish domestic economy, rising living costs, geopolitical uncertainties, and heightened political instability.
The index fell to 51.7 in July, down from 52.7 in June, underscoring the mounting anxiety among Thai consumers. University president Thanavath Phonvichai warned that consumer sentiment remains fragile and shows “no signs of recovery,” with purchasing power still markedly weak.
“The economy shows signs of stagnation and needs more stimulation,” Thanavath told reporters, projecting that GDP growth may slow to just 1.7% in 2025, down from 2.5% last year.
Global Headwinds and Trade Uncertainty
Ongoing global trade tensions are also taking a toll. Despite a recent reduction in U.S. tariffs on Thai imports, from 36% to 19%, uncertainty remains around transshipment rules, particularly for goods originating from third countries and routed through Thailand.
“What needs to be clearly defined is tariffs on transshipments. They must be explicitly outlined for businesses to adapt accordingly,” Thanavath stressed.
Domestic Political Instability Weighs Heavily
On the domestic front, political uncertainty has further dampened confidence. The recent suspension of Prime Minister Paetongtarn Shinawatra, pending a court ruling over her controversial phone conversation with former Cambodian leader Hun Sen, has created fresh unease.
“The political situation remains unstable following the prime minister’s suspension from duty, creating an unclear outlook and undermining confidence,” Thanavath added.
A Call for Economic Stimulus
With household spending restrained by persistently high living costs and low consumer morale, economists are calling for more decisive fiscal stimulus to prevent a prolonged downturn.
“People are holding back on spending. Without strong measures to revive the economy, we risk falling further behind our growth targets,” the UTCC said in its report.
As policymakers grapple with both global pressures and a volatile domestic landscape, the path to economic recovery appears increasingly uncertain.
