Jun. 12--Confidence among Thai consumers fell to a seven-year low in May, on the back of growing concerns over the cost of living, the government's stability and higher oil prices.

The Consumer Confidence Index (CCI) fell to an 84-month low of 71.5 from 72.1 in April, according to a survey by the University of the Thai Chamber of Commerce (UTCC).

A score below 100 indicates pessimists outweigh optimists. The index has been below 100 for 59 consecutive months.

The figures are based on a nationwide survey of 2,238 respondents.

The index on the overall economy fell to its lowest point in 90 months, registering 64.3 in May, down from 65.1 in April. The job opportunity index dropped to 63.8 from 64.5 and future income to 86.2 from 86.7.

According to Saowanee Thairungroj, vice-president of the university's research division, Thai consumers' principal concerns are the political situation and the economic recession. They feared the unemployment rate would rise and higher oil prices would increase their cost of living.

"Amid a poor economic outlook, people are worried in particular about their jobs," said Thanavath Phonvichai, an economist at the university.

"Though the business sector feels that the economic situation has improved, consumers don't think things will improve soon."

The government should step up its budget disbursements to implement programmes to stimulate employment. It should also quickly approve a new stimulus package to boost performance and job creation in the second and third fiscal quarters, he added.

The UTCC projected the Thai economy would contract by as much as 5 percent this year if the government's royal decree to procure 400 billion baht in loans fails to win legislative approval next week.

Thailand's economy declined more than expected in the first quarter, prompting the state planning agency, the National Economic and Social Development Board, to cut its forecast for the year to a contraction of between 2.5 percent and 3.5 percent, from an earlier projection of zero growth to a -1 percent decline.

Gross domestic product fell 7.1 percent in the first three months due to falling exports and a tourism slump, after declining 4.2 percent in the previous three months.

Unemployment rose to 2.1 percent in the first quarter, or about 780,000 -- mainly due to job cuts by manufacturers and new graduates entering the market -- compared with 1.6 percent a year earlier.

Unemployment may rise at a lower rate than previously forecast, as the government's economic stimulus measures should help spur demand and employment in this quarter and the next, according to the state planning agency.

Unemployment is now expected to reach 2.5 percent of the workforce this year, or about 900,000, compared with 3.5 percent, or 1.33 million, projected in March.

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