BANGKOK, July 2015 – The Kasikorn Research Center (K-Research) has revealed that the local KR Household Economic Condition Index (KR-EIC) was at 43.8 in June, its lowest point in 11 months.
It attributed the drop to the increasing cost of living, while revising down the KR-EIC figure in the next three months to 45.2 from 47.7, which if realized, would be the lowest figure in 13 months. The grim projection is backed by the fact that employment and income rates are still recovering, while the personal debt rate continues to rise. The center indicated that the factors holding back the household sector are increasing commodity product prices, with decreasing income and household savings.
Despite the inflation rate being maintained during the first half of 2015, the private sector’s spending has not yet fully recovered as the household sector still has diminishing purchasing power while living expenses continue to rise.
Household debt had a slower growth rate in the first quarter, as consumers became more cautious in their spending, and financial institutes hardened their lending policies. Spending in the real estate sector grew only 1.7 percent over the quarter, while K-Research expected the figure would reach 2 percent. The lower-than-expected figure is due to the decreasing public purchasing power and the subdued economy.
