Jul. 10--Consumer confidence edged up in June for the first time in five months as Parliament approved the government's plans to borrow funds for a second economic stimulus package.

But economists warned that consumer confidence remains fragile because of lingering political uncertainty and the H1N1 outbreak, which has already claimed 13 lives in the country.

The Consumer Confidence Index (CCI) rose, for the first time since January, to 72.5 in June from 71.5 in May, according to a survey by the University of the Thai Chamber of Commerce (UTCC).

A score below 100 indicates that pessimists outweigh optimists. The index has now been below 100 for 60 consecutive months. The figures are based on a nationwide survey of 2,245 respondents.

The index's figures for the overall economy (65.4), job opportunity (64.7) and future income (87.4) all edged up -- from 64.3, 63.8, and 86.2, respectively.

"The rebound is based on hopes that the situation will get better after parliament authorised the government to borrow 800 billion baht for a three-year [2010-12] stimulus package," said Saowanee Thairungroj, vice-president of the university's research division.

Despite the improvement, sentiment is unlikely to pick up significantly until unemployment and the cost of living are reduced, which could happen in the third quarter of 2009, said Thanavath Phonvichai, a university economist.

The government should therefore kick off the second economic stimulus package in the third quarter of this year to create jobs and boost demand, he said.

Mr Thanavath added that the government should contain the spread of the H1N1 virus and ensure political stability to restore consumers' confidence and private investment.

The H1N1 virus is likely to pull down the country's gross domestic product by another 0.3 percent if its spread continues until September, according to the university's forecast. As a consequence, Thailand's economy would contract by as much as 3.8 percent to 4.8 percent by year-end, down from an earlier projection of a fall of 3.5 percent to 4.5 percent.

Phongsak Assakul, vice-chairman of the Chamber, said Thailand's economy had bottomed out, and he urged the government to step up measures to lift exports to capitalise on a global recovery.

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