Cost of Living
Political situation, concern over living costs
Spending by Thai consumers over the New Year holiday is projected to grow by just 5.6 per cent compared to the same period last year, due to weak sentiment arising from concern over the political conflict and the higher cost of living.
A survey by the University of the Thai Chamber of Commerce covering 1,188 respondents showed New Year consumer spending would expand by the smallest amount since the economy began to recover from the severe flooding in 2011.
Some Bt111.75 billion is expected to be spent over the holiday period.
"Spending is expected to grow slightly this year, as the impact from the internal conflict has resulted in lower consumer confidence. People are tending to spend less on everything, including luxury goods and durable goods - and on celebrating," Thanavath Phonvichai, director of the UTCC's Economic and Business Forecasting Centre, said yesterday.
Last year, spending during the New Year festivities rose by 15.6 per cent to Bt105.82 billion, as there was a positive outlook amid recovering economic growth.
Besides the political situation, consumers are also reluctant to spend their money at this time of year out of worry over the rising cost of living, he said.
An expected increase in the price of diesel next year, after the duty waiver ends on December 31, has added to the public's concern.
He said that although the government was currently acting in a caretaker capacity, it should do something to curb diesel prices, otherwise the effects could be felt in higher goods prices and living costs next year.
Thanavath added that if diesel prices increased next year, economic growth could come in lower than expected, at only 3-4 per cent.
UTCC president Saowanee Thairungroj said consumers already expected that their incomes would increase only slightly when compared with the rising cost of living next year.
About 57 per cent of respondents said goods prices in 2014 would increase, while their savings would be slightly lower than this year's level.
Almost 44 per cent of respondents said their debt had increased this year, while 33 per cent said it was unchanged and the remainder said it had been lowered.
Saowanee said expenditure in the household sector was quite worrying, as respondents said they had to borrow more for daily spending rather than for investment or buying a home.
Wachara Kuntaweethep, assistant director of the forecasting centre, said the survey had found that most spending during the New Year period would go on travel, the purchase of durable goods, buying gifts, celebrations and donations.
On average, Thais will spend Bt11,816 per person over the New Year. Popular New Year's presents are fruit baskets, gift baskets, gift vouchers and cheques, snacks, food supplements, greeting cards, durable goods, alcohol, handicrafts, luxury items, clothes and One Tambon One Product items.
More travellers will go abroad than last year. Of the respondents who said they would travel, 15.7 per cent said they would go overseas, while just 10.9 per cent went abroad last year.
Thais intending to make a journey will each spend an average of Bt9,856 on domestic travel, and Bt75,228 on overseas trips over the New Year's holiday.
Asia has become a more popular destination among Thai travellers, while the central region is the most popular destination for domestic travel.
However, 0.6 per cent fewer travellers plan to visit Bangkok and nearby provinces than last year, due to concern over the ongoing political turbulence.