Business sentiment plunged to a 39-month low in April after the business sector became concerned about the severity of the new Covid-19 outbreak, lower purchasing power, rising unemployment and public debt.
The University of the Thai Chamber of Commerce (UTCC) revealed the TCC Confidence Index on Tuesday, which gauges the sentiment of Thai Chamber members in every province, noting a drop to 27.6 in April from 30.7 in March, 29.6 in February and 29.8 in January.
Thanavath Phonvichai, the UTCC president, said business sentiment dropped in all regions as the sector struggles to cope with the impact of the outbreak.
He said more businesses are shutting down operations following a fresh wave of infections.
"The majority of business owners surveyed expressed concern about rising unemployment and mass layoffs, particularly in the tourism sector, which has been hit hard by the outbreak," said Mr Thanavath. "Rising unemployment and household debt will result in more social problems and devastate the overall economy."
He suggested the government speed up vaccine distribution and new economic stimulus measures, especially the popular co-payment scheme. Faster enforcement of these measures should help to shore up the economy, said Mr Thanavath.
The new measures should enable businesses to maintain their operations and employment, he said.
"In particular, the Khon La Khrueng co-payment scheme benefits most middle-income earners," said Mr Thanavath.
"If 3,000 baht is handed out to each of the 31 million eligible recipients, the government will spend about 90 billion baht. Combined with spending by the public, this totals 180 billion baht circulating in the economy."
Under the co-payment subsidy scheme, the government pays for 50% of food, drink and general goods purchases of up to 150 baht per person per day, capped at 3,500 baht per person for a specified duration.
The first phase of the scheme started on Oct 23 and ended on Dec 31. The government allocated 30 billion baht for the first phase, covering 10 million people, with each receiving a 3,000-baht money transfer.
The second phase, which started on Jan 1 and ended March 31, covers an additional 5 million people with the subsidy raised to 3,500 baht per person.
In March, Finance Minister Arkhom Termpittayapaisith said the government would roll out a third phase of the co-payment scheme, possibly in the third quarter, but first it must tackle loopholes open to fraud and reevaluate the scheme's efficacy in stimulating spending and the overall economy.
Mr Arkhom said before the launch of a new phase, the ministry needs to reassess whether existing phases could improve the economy and consumption.
He said the ministry is waiting for figures about consumer consumption in the first and second quarters to see how much the co-payment subsidy scheme, We Travel Together tourism stimulus scheme and Rao Chana (We Win) financial aid scheme increased consumption and the overall economy.
Mr Arkhom said funding for the third phase is likely to come from the 1-trillion-baht emergency loan decree, particularly the 400 billion baht allotted for economic and social rehabilitation, which still has around 200 billion remaining.
