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11 Oct 2019

Thai Economy

KR-ECI in September 19 edges up, albeit slightly Households show signs of adjusting their behavior to match their income limit


              The KR-ECI in September 2019 edged up from 41.9 in August 2019 to 42.3 in September due to declining concerns of households over their expenses, savings, debt burden and domestic prices. Nonetheless, they are more worried about their income and employment. This change shows that households have adjusted their spending behavior by becoming more cautious and focusing on savings for the future as their income has not increased.

              The 3-month Expected KR-ECI in September 2019 remains unchanged at 44.4, close to the previous month's level of 44.3. In the next three months (October-December 2019), households are more worried about their expenses and merchandise prices, and less worried about their income. This is partly attributed to the seasonal factor as households tend to spend more in December than they do during other months of the year. Also, December is the month when companies increase wages/salary and give an annual bonus to their employees.

            KResearch views that the economic status and well-being of Thai households in 4Q19 will gradually improve, partly due to the government's stimulus measures, including an income guarantee for rice farmers, palm oil and rubber planters as well as the THB1,000 cash handout under the first phase of the so-called “Chim, Shop, Chai" program, which should somewhat ease the burden of the households in the short term. In addition to the allowances for babies, the newly-introduced campaigns, namely "Visit Thailand with 100 Baht" and "Shocking Price Weekday Travel" should help stimulate domestic spending. Nonetheless, it remains to be seen how effective the effort to rehabilitate houses and plantations which suffered from the flooding that hit several provinces in the Northeast will be and how quickly the situation will return to normalcy because it will impact the well-being of families living in the northeastern region.

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Thai Economy