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14 Jul 2020

Econ Digest

KR-ECI in June 2020 suggests that the perception of households towards living conditions will continue to improve, although the main tasks are to support business sectors and to sustain employment.

        KResearch conducted a survey on the living conditions of Thai households in June 2020, at which time the the COVID-19 outbreak in Thailand was continuously improving with no new domestic infection cases reported for months in a row, while the government had relaxed some preventive measures at different stages. The survey found that:     

 

         KR-ECI in June 2020 stood at 36.0, maintaining a similar level of 36.1 in May 2020, as the government exercised further relaxation of preventive measures on activities and businesses in the yellow band (Phase 3) and the red band (Phase 4), as well as the revocation of the decree that prohibited people from leaving their homes (lifting of curfew). As a result, the majority of economic activities resumed their operations, allowing income and employment within Thai households to gradually increase from the level in May 2020. Meanwhile, Thai households incurred greater financial burdens in June 2020 from the rising prices of goods, especially in energy and public utilities. Certain households also bore additional expenses that were related to the education of their children prior to the start of new school semesters on July 1, 2020.

  

       The 3-month Expected KR-ECI (during July to September) remained at 37.4, improved from the 35.9 recorded in the previous survey. For the first time in 7 months, the KR-ECI for the next three months was found to be higher than the current economic condition index. This turnaround suggests the perception of households towards economic conditions in 3Q20 will continue to improve, going forward. However, the living conditions of Thai households still rely on relief measures from the government and financial institutions, which will affect the perception of households. Therefore, it is necessary to monitor the economic and living conditions of Thai households after the relief measures come to an end.   

 

        KResearch views that the Thai household economic conditions in 2H20 remain extremely fragile, even though the government has already issued relief measures for all types of economic activities/businesses. Future surveys will reflect different results if the situation changes, while a close eye shall be kept on the COVID-19 situation in Thailand, as it may affect government policy in handling various problems and the direction of economic recovery in the near future.

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