How important is confidence?
It’s significant enough to warrant the creation of Consumer Confidence Index and Investor Confidence Index. To put it simply, let’s say we have 100 baht in our pocket today. If we are confident that we’ll have a job and an opportunity for more income in the next three months, we’ll spend the 100 baht without worry. If it’s a company, they would dare to take out a loan to invest more, knowing that the future income will cover the debt with interest.
But if we are including the risk of sales decline or layoff, we will hold onto our 100 baht tightly, and cut down on expenses. When many people and companies think this way, the overall economy come to a halt, as seen after the recent election three months ago before we got the new government.
The most fundamental necessities to our lives is the four basic necessities, especially food and sustenance for ourselves and those we care for. Having the ‘confidence’ that we will ‘continue to have’ jobs, income, and security in the future can help reduce problems in society.
As I finished the original draft, the announcement of the 30th Prime Minister came just in time. If there are no political issues, both private sector investment and consumer confidence are likely to increase. This will lead to business expansion and increased investment. Additionally, government budget spending is expected to begin around March 2024. What the public should observe after the new government implements its policies is development that goes beyond economic figures in the second quarter.
In simple terms, private sector spending should remain strong with support from middle-to-high-income earners. To increase spending of the lower-income group, the government may help by reducing the debt burden and interest for household and farmer debts.
While government spending and investment plans might face time constraints, we can enhance private sector participation ahead of time by building confidence through clear development policies and targeted tax incentives. Lastly, the government should focus on expanding exports and finding new markets to replace the decrease in Chinese tourists during the high season. If we can keep these three factors going, boosting confidence among all stakeholders will help speed up the country’s economic recovery soon.
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