Thai consumer confidence rebounds from 5-year low

Suttinee Yuvejwattana, Bloomberg

Thailand’s consumer sentiment rebounded from a five-year low as the prospect of a general election this month and an improving economy revived optimism.

The confidence index rose for the first time in a year to 69.3 in November from 68.6 in October, the University of the Thai Chamber of Commerce said in Bangkok today. The October reading was the lowest since January 2002. The gauge tracks a nationwide survey of 2,253 respondents.

“The end of political uncertainty and a new elected government should pave the way for a resumption of growth in domestic demand,” said Yeo Han Sia, a currency strategist at Bank of America Corp. in Singapore. “The economy could outperform.”

The junta that seized power from Thaksin Shinawatra is counting on the Dec. 23 election to spur consumption and investment. The nation has been relying on exports for growth since last year’s putsch.

“This may be a good sign of a spending recovery from the fourth quarter onward,” Thanavath Phonvichai, an economist at the university, told reporters in Bangkok today. “But the election will only boost sentiment in the short term. If the newly elected government fails to secure public confidence, the economy may be in trouble.”

Surging exports and government spending may help Southeast Asia’s second-biggest economy expand by more than 5 percent next year, Finance Minister Chalongphob Sussangkarn said Dec. 7.

Shipments abroad will continue to grow at a “double-digit rate” next year, Chalongphob said. The economy may expand by at least 5 percent this quarter, taking 2007 growth to more than 4.5 percent, the finance minister said.

Thailand’s new vehicle sales rose 13 percent in October to a 10-month high. Advertising spending rose 7 percent in November, the fifth straight monthly gain.