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Published on December 29, 2007

Major retailers will urge the new government to stimulate spending by raising consumer confidence and investing in mega-projects.

Political stability should also be a priority concern, they say.

Thanapon Tangkananan, president of the Thai Retailers Association, estimates that growth in the sector slowed to 5 per cent this year. Usually the retail industry expands by 9-10 per cent a year, or double the economic growth rate.

"The oil price is still fluctuating and may lead to high inflation and impact the overall economy. The new government should control product prices as they will create a high inflation problem," Thanapon said.

The association reported that retail sales slumped to 4 per cent in the first quarter, compared to growth of 8-9 per cent in the same quarter last year.

With a value of Bt1.2 trillion, the sector accounts for 14 per cent of gross domestic product.

About Bt470 billion of retail sales came from modern retail stores and Bt700 billion-Bt800 billion from traditional retail outlets.

Tos Chirathivat, chief executive of Central Retail Corp, said the group expects its sales to perform 7-8 per cent better this year at Bt74 billion, which is worse than the 11-per-cent growth posted last year.

"Political stability is considered by the business sector as the most important factor, as that will raise their confidence and investment, as well as foreign investment," Tos said.

The private sector needs certainty from the new government in issuing laws and regulations such as the amended Foreign Business Act and the retail business law, as that would allow them to make accurate business plans, he said.

For instance, the country's first Retail Business Act - the draft of which stalled before the National Legislative Assembly, but which might be taken up by the new government - should not impact or obstruct the overall industry, but solve the retail problem directly at its crux, he said.

"Retailing is an important industry, involving directly consumers, domestic employment and investment. It also links directly with individual suppliers," he added.

Darmp Sukontasap, a senior vice president of Tesco Lotus, was encouraged to see a tremendous turnout for the last election.

"This indicates that most Thais are looking forward to greater political and economic stability following the election. In fact, in my view, this is the most urgent task for the new government - to restore investor and consumer confidence and get the economy back on track.

"But, of course, political stability will have to come first. It is the only way that the new government can get its policies implemented in an effective manner," he said.

"As for next year, as the political and economic situation improves, we will see that the retail and wholesale sector continues to expand. The potential is there. It's just a matter of Thailand getting its act together."

The past two years have provided sufficient evidence to prove that the country's economic fundamentals were sound enough to withstand the challenges from the strengthening of the baht and rising oil prices, Darmp said, adding that bringing back the confidence of investors and consumers would then be the key to future economic growth.

Kwanchai Rungfapaisarn

 The Nation