Bangkok: The consumer confidence index for May 2026 has dropped to 49.5, marking its lowest point in 42 months. This decline is primarily linked to concerns over ongoing conflicts in the Middle East and rising energy prices. Authorities are optimistic that the Thai economy has moved past its lowest phase and are banking on the "Thai Helps Thai Plus" project to stimulate the economy with an injection of 200-250 billion baht.
According to Thai News Agency, Mr. Thanawat Pholvichai, Chief Advisor to the Center for Economic and Business Forecasting and President of the University of the Thai Chamber of Commerce, reported that the consumer confidence index for May 2026 decreased from 50.6 in April, marking a continued decline for the third month. This drop is attributed to consumer anxiety over potential conflicts involving the United States, Israel, and Iran, alongside high oil prices, which threaten economic growth and living costs.
Consumers have been cautious with their spending in the year's first half, waiting for clarity on the Middle East conflict, government strategies to counter high energy prices, and the impact of economic stimulus measures on public confidence. The overall economic confidence index stood at 43.1, with the job opportunity confidence index at 47.5 and the future income confidence index at 57.9.
The consumer confidence index in June will be critical in assessing if public confidence is on the mend after the government's "Thai Helps Thai Plus" initiative, which will circulate approximately 200,000-250,000 million baht into the economy between June and September. This initiative aims to bolster the grassroots economy and support SMEs.
It is believed that the Thai economy has rebounded from its lowest point, as evidenced by the improving economic growth rate from last year's third quarter, increasing from 1.2% to 2.8% by the first quarter of this year. The Joint Committee of the Three Private Sector Institutions (JCC) forecasts economic growth of 1.6-2% for 2026, while the University of the Thai Chamber of Commerce predicts potential growth of 2-2.5% if geopolitical tensions ease and economic measures prove effective.
The agricultural sector is witnessing positive trends with rising prices for commodities such as rubber, palm oil, and jasmine rice, spurred by increasing global oil prices, which are expected to enhance farmers' income and purchasing power. Meanwhile, the tourism sector is gradually stabilizing despite challenges from the global economy and high airfare costs. The Thai economy continues to show a K-shaped recovery pattern, with growth observed in export-related businesses, the AI industry, and information technology, while SMEs face challenges due to weak purchasing power and rising operational costs.
The Thai Chamber of Commerce's Sentiment Index for May 2026 also fell from 42.2 to 41.7, marking the third consecutive month of decline, driven by prolonged war fears, rising diesel prices, higher production costs, and PM2.5 air pollution. Confidence indices declined across sectors, including the economy, consumption, investment, tourism, and border trade.
The most significant decline was seen in employment, reflecting business concerns about hiring slowdowns and layoffs to manage rising energy costs. Despite these challenges, Thailand's unemployment rate remains low at 1%, or approximately 400,000 people, indicating full employment with no significant layoffs. The "Thailand Helps Thailand Plus" measures are expected to help sustain employment levels in the business sector.
Mr. Thanawat has urged the government to implement additional measures to support entrepreneurs, such as managing energy and electricity costs, offering low-interest loans through state financial institutions, and easing debt restructuring criteria to help businesses maintain liquidity during this fragile period.