Thailand’s consumer confidence has continued to deteriorate despite the recent tax reforms meant to bolster consumption.

The consumer confidence index produced by the University of the Thai Chamber of Commerce dropped to 72.6 in May, an eight-month low.

The slough in sentiment comes despite the military government’s approval in April of a plan to raise the country’s personal monthly and annual income tax thresholds, introduced to boost consumption ahead of a referendum in August on whether to approve the current junta’s proposed constitution. But heavy household debt – among the highest in the region – may be weighing on spending.

Also working against consumers are falling exports, which shrank 7.6 per cent year-on-year in April. Data released late last month by the central bank showed a fallback in private consumption compared to the previous year, while private investment stood unchanged.

Consumer prices only recently returned to growth in Thailand, with May marking the second month of growth for the official consumer price index after 15 consecutive months of falling prices.

Copyright The Financial Times Limited 2018. All rights reserved.

Comments have not been enabled for this article.