• The KR-ECI and 3-month Expected KR-ECI increased for the fourth consecutive month in October 2020 because households, in particular those in the agricultural sector, were more optimistic about employment and income. The improved sentiment seen in agricultural households was consistent with steady increases in agricultural prices during 3Q20, including rice, vegetables and fruits, especially rubber prices, which surged to the highest level in more than three years during October 2020. However, sentiment of households in Greater Bangkok towards employment and income did not improve, which was in alignment with the results of an additional survey conducted by KResearch, showing steady increases in the number of employees being laid off.
• Households overall were still concerned about higher expenditures because the year-end holiday season is fast approaching. This is consistent with the component on household expenses (excluding debt) of the 3-month Expected KR-ECI, which declined in October 2020. However, the government’s stimulus measures, in particular the program to give cash to welfare cardholders and the 3,000-Baht co-payment scheme, may help ease households’ financial burden somewhat.
• KResearch is of the view that although the government’s economic stimulus measures above are only short term, they will likely help reinvigorate spending and sustain economic growth during 4Q20. However, the Thai economy will continue to experience many challenges ahead, including rising unemployment, the fact that the business sector has yet to recover to its pre-COVID-19 level and uncertainties surrounding domestic politics.
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