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11 Aug 2020

Econ Digest

KR-ECI reflects more concerns over the next three months

        The KR Household Economic Condition Index (KR-ECI) stood at 35.3 in July 2020, declining from 36.0 in June, because households were more concerned about debt burden, expenses and domestic prices of goods and services. Although the Bank of Thailand (BOT) has introduced the second phase of debt relief measures, the debt servicing ability of most households is still inhibited by issues related to income and employment.

        Meanwhile, the 3-month Expected KR-ECI also dropped to 36.8 in July 2020 from 37.4 in June, as households were more anxious about all aspects associated with the cost of living over the following three months (August-October); in particular, prices of goods and services, raw foods and energy, which rose in July 2020. This dip was also partly due to concerns over a second wave of COVID-19 outbreak in the country as a result of an incident (a lapse in the screening process that allowed infected foreigners to pose a risk to public health) which occurred in early July 2020.  
            
        Although the KR-ECI for the next three months has been found to be higher than the current economic condition index for the second consecutive month, it is still much lower than the pre-pandemic period. This suggests that the perception of households towards the economic conditions has passed its lowest point but has not rebounded to the level of before the epidemic, even though the government has already issued an easing of restrictions on all types of economic activities/businesses. KResearch views that the economic and living conditions of Thai households during the remainder of 2020 will remain fragile, while the recovery of domestic purchasing power will be limited, partly because of domestic unemployment amid the global economic recession.  

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Econ Digest