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17 Sep 2020

Econ Digest

KR-ECI improves due to the support of domestic tourism stimulus measures and Phase 6 lockdown relaxation

The KR Household Economic Condition Index (KR-ECI) in August 2020 and the 3-month Expected KR-ECI stood at 36.4 and 38.4 respectively, increased from the survey in July 2020, suggesting that the perception of households towards living conditions improved in line with the relaxation of lockdown measures. Households had better perspectives on the employment situation and compensation as a result of the domestic tourism stimulus measures and the Phase 6 relaxation of preventive measures. Although the measures have been eased to a normal level which is close to the conditions before the COVID-19 pandemic, many economic activities have not reached their full potential since international tourists are not allowed to enter Thailand yet. As a result, employment risk persists, which may affect household spending and economic recovery in the future.   

However, the 3-month Expected KR-ECI suggests that households are more concerned about living expense burdens in the next three months, which could be caused by the rising trend of the prices of goods. In particular, prices of raw foods increased in August, especially for fresh vegetables which climbed to a 13-month high, as heavy rains damaged crops. In addition, households remain cautious with their spending, reflected by the survey results regarding the decision to purchase durable goods, as most respondents reported to have decided to delay or stop buying durable goods under the current economic situation as a result of a decrease in regular income.

           Although the current KR-ECI and the 3-month Expected KR-ECI have increased from the previous month and may have passed their lowest point, these indexes remain lower than the levels in the period before the COVID-19 outbreak in Thailand, suggesting that the perception of households towards economic and living conditions has not returned to normal levels.

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Econ Digest