SURVEY PREDICTS LOWER SPENDING ON NEW YEAR FESTIVITIES

By Petchanet Pratruangkrai
The Nation
Published on November 7, 2008

Consumers are likely to spend less dur¬ing the New Year festivities this year due to weak economic sentiment, according to a survey by the University of Thai Chamber of Commerce.

Based on the survey of 1,194 respon¬dents from October 27 to 31, about 72 per cent said they would spend less during the New Year period. About 16 per cent are expected to spend as much as last year, and only 11.4 per cent would spend more.

"Lower spending could lead to lower growth of the domestic econo¬my in the fourth quarter this year. Normally, the country's economy dur¬ing the end of the year will get a boost from the spending fest," said Thanavath Phonvichai, director of the university's economic and business forecasting centre.

He pointed out that consumers are also likely to shoulder higher debts during the yearend through early next year. They have to borrow more money to cope with the higher prices of goods amid a lack of liquidity.

People would borrow more, in par¬ticular from the "unorganised market" next year to meet higher daily living expenses. Thanavath said the coun¬try's economy is at risk to face lower liq¬uidity as the Bank of Thailand has said excessive liquidity will drop from Bt1.5 trillion to Bt1 trillion next year.

The government must closely crack down on underground loans. Accessing such illegal loans will harm household liquidity and the whole economy, said Thanavath.

He added that the government may consider cutting the policy interest rate by 25 basis points in the fourth quarter this year to reduce the burden of consumers and enterprises.

In addition, the Chamber Business Poll of the university found that spending during the Loy Krathong festival will increase by 7.4 per cent to Bt8.8 billion this year, mainly due to higher consumer goods prices.

Last year's spending during the festival totalled Bt8.2 billion.

Saowanee Thairungroj, the university's vice president of the research division, said

Thais would spend an average of Bt1,149.37 during Loy Krathong, an increase by 11.6 per cent from last year same period.

Spending will come from salaries, savings, bonuses and other sources.

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SURVEY PREDICTS LOWER SPENDING ON NEW YEAR FESTIVITIES

Consumers are likely to spend less dur¬ing the New Year festivities this year due to weak economic sentiment, according to a survey by the University of Thai Chamber of Commerce.

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