Spending for New Year to increase 7.2%, UTCC forecasted
YEAR-END spending should exceed Bt150 billion this year, an increase of 7.21 per cent, thanks partly to the government’s shopping stimulus package, according to an annual survey by the University of the Thai Chamber of Commerce (UTCC).
If the government had not announced that tax incentive, spending during the New Year period would have increased by only 3.4 per cent compared with 12 months ago - the lowest growth in five years - to Bt129 billion.
“As a result of the tax-deduction measures to stimulate spending during the New Year [period], spending will increase. Moreover, with higher crop prices and the government’s efforts to monitor prices, people are expected to spend more during this New Year festive period,” said Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre.
The shopping-stimulus period is four days longer than last time, extended to 14 days from 10, so spending should be higher. Moreover, as Chinese New Year is coming earlier than usual, festivities should stimulate spending continuously until the end of January, which will result in stronger economic growth in 2017, he said.
The Lunar New Year’s Day falls on January 28.
The UTCC also believes that the additional budget of Bt100 billion that the government will inject to stimulate local economies from January to April should also help drive the country’s overall growth.
Under the shopping measure, the UTCC expects about 3 million of the 10 million Thais who pay income tax to take advantage of the tax deduction.
The higher spending is expected to benefit tourism-related businesses such as hotels, restaurants, transport companies and petrol stations.
However, consumers are still worried about rising prices.
Based on a survey of 1,223 respondents, Thais will spend more during the festive season because of a positive outlook on the country’s future economic growth after the government’s stimulus measures for rural areas and investment projects helped drive business growth.
Fewer travellers are going abroad this year. Of the respondents who said they would travel, 15.1 per cent said they would go overseas, while 84.9 per cent will travel within Thailand.
On average, domestic travellers will each spend Bt12,800 during the New Year’s holiday, while for those travelling overseas, spending would come to Bt65,300 per person.
The poll found that most consumers planned to spend money on the same things as during last year’s festival – parties, merit-making and purchases of consumer, luxury and durable goods, in that order.
Meanwhile, the UTCC gave a score of 6.27 out of 10 for the government’s work during the past year, in particular its efforts to solve economic problems.
