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10 Aug 2022

Thai Economy

Households begin adjusting their spending behavior as most of them view that product prices will remain high for at least another year. The KR-ECI for July 2022 improved from its lowest-ever level following a slight drop in oil prices over the past month.


-    The KR-ECI and 3-month Expected KR-ECI in July 2022 improved to 32.5 and 34.0, from their lowest-ever levels at 30.8 and 32.9 reported for June 2022, due to energy prices that were slightly lower than June, albeit remaining high. Additionally, further relaxation of Thailand’s entry restrictions has resulted in a steady increase in foreign tourists, leading to improved household perception towards income and employment.  However, components of the KR-ECI showed that most households still viewed that overall expenses were increasing, while more households were concerned about the future, and have thus increasingly reduced their spending at present.
-    Another survey conducted by KResearch on timing and the situation of high product prices showed that a majority of respondents (65.6 percent) viewed that product prices were set to stay at elevated levels for more than one year, so they have begun adjusting their spending behavior. Most of them (27.7 percent) cut expenses on unnecessary activities such as parties, while also using consumer goods in smaller quantities.
-    Looking ahead, households still tend to see persistently high product prices due to rising production costs being passed on to consumers, highly uncertain energy prices, as well as soaring costs of utilities and basic necessities such as electricity, cooking gas, etc. However, it is expected that in 2H22 the tourism sector, a key factor driving Thai economic recovery this year, will partly support household employment and income. Additionally, the government’s relief measures, such as the fifth phase of the co-payment program (to be implemented in September 2022) and others, will help sustain economic and living conditions of households amid the income and expenditure mismatch.

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Thai Economy