Slower growth seen in back-to-school spending

Parents’ spending during the upcoming back-to-school period now is expected to increase by 6.7 per cent year on year to more than Bt53.61 billion, lower than previously anticipated despite higher wages because of rising goods prices and lower crop prices, according to a survey by the University of the Thai Chamber of Commerce.

The UTCC claims this trend indicates that economic growth is slowing. It had previously projected that back-to-school spending should increase by 8-10 per cent to more than Bt55 billion.

 

Economic indicator  

“The back-to-school period is an economic indicator. Although more spending will be seen this year, it will be due to higher prices. It is not a good sign, as people are spending more not because of confidence in economic growth, but mainly because of higher prices,” Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre, said yesterday.

Last year’s back-to-school spending amounted to Bt50.24 billion, an increase of 7 per cent from 2011.

Thanavath said that according to the survey, parents were highly concerned that they would not have enough money to cover their necessary expenses during the back-to-school period. 

Despite the improved daily minimum wage to Bt300, the lower prices for farm crops and higher goods prices had created financial concerns among parents, he said. The baht’s strength, which has affected small and medium-sized enterprises, has also hit consumer-spending confidence, he claimed.

In the survey of 1,200 parents from May 1-5, 50.8 per cent said they would not have enough money for prepare their children for the new term. That figure is an increase from last year’s 40.6 per cent, and could mean more parents will go into debt via credit cards, pawn shops or other forms of borrowing.

Last year, only 26.8 per cent of parents said they would go to pawn shops, but this year that is expected to increase to 39 per cent. People will also use more credit cards, from only 0.8 per cent in 2012 to 6.1 per cent this year, according to the respondents’ estimates.

Parents could also turn to loan sharks as well as commercial banks and other financial institutions.

Most parents also said the cost of school fees and education equipment had increased. Average spending per student will be Bt9,128.34. 

Respondents to the survey said the government had paid too little attention to educational development. 

They gave it just 5.5 points out of 10 for its education policy.

Parents also said students had only enjoyed moderate benefit from the free-tablet scheme conducted by the government over the past year. Half of respondents agreed that the government should continue to distribute free tablets, but said the devices should be given to students older than Pathom 1. 

More than 44 per cent said children used the tablets for playing games rather than searching for knowledge or for learning.