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10 May 2022

Thai Economy

April KR-ECI has remained low for two straight months amid elevated goods prices. Economic and living conditions of households are still fragile after the government scrapped subsidies for several necessities such as fuels and cooking gas

  • A survey on economic and living conditions of Thai households in April 2022 shows that they were still concerned about elevated goods prices. The KR-ECI and 3-month Expected KR-ECI for April 2022 fell to 32.5 and 35.5, from the 33.4 and 36.1 reported in March 2022. Having considered components of the KR-ECI, it was found households were increasingly worried about “food and beverage prices”, “energy costs” and “utility expenses“ after the government scrapped the cooking gas subsidy and allowed the price to gradually rise. The cap on diesel fuel price at THB30/liter was lifted in May 2022, and its price will gradually increase thereafter, as well. The fourth phase of the co-payment program also expired in April 2022.   
  • Another survey conducted by KResearch on how households cope with the rising cost of living shows that a majority of the respondents (29.9 percent) intended to buy smaller packages of consumer goods or switch to new brands that are cheaper. Another survey on the impact of the expiration of the fourth phase of the co-payment program on household expenditures shows that over 40 percent of the respondents intended to cut their spending because they may be able to buy fewer goods with the same amount of cash. This suggests that the expected decline in household spending will affect the economic recovery and employment, going forward.
  • It is expected that higher goods prices will continue to pressure the KR-ECI at least until the end of 1H22 although this will largely depend on global energy prices and the transfer of costs to consumers after the government relief measures or subsidies/financial assistance measures will gradually expire. KResearch is of the view that while household income and employment have yet to fully recover and goods prices are set to increase further amid fragile economic and living conditions due to hefty household debts, the government may need to implement new assistance measures to help sustain income or ease the high cost of living. 

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Thai Economy