Songkran spending is forecast to grow by a low 2.36 per cent from 2013, the lowest in four years, because of the political storm, according to a survey by the University of the Thai Chamber of Commerce (UTCC).
“Normally spending during the festival should grow by double the rate of economic expansion. However, consumers have high concern about the political turmoil, so spending and travel will not increase much this year,” said Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre.
The forecast was derived from 1,233 respondents, the survey indicating that spending during Songkran will amount to Bt116.81 billion, compared with last year’s Bt114.11 billion, which was up by 10.42 per cent from 2012.
The last time Songkran spending grew so slowly was in 2010, during the red shirts’ protest.
Thanavath said consumers’ confidence was easily hit by the political mess as the problem had directly affected the country’s economic growth. People will keep their money in their pockets as they worry about their future incomes.
He noted that the current atmosphere resembled that of the 1990s Asian financial crisis, which also led people to spend less and hurt their celebratory mood.
Three years ago, only 9.7 per cent of respondents said they would borrow for spending during Songkran, but this year 20.1 per cent said they would do so.
Based on the survey, the major sources of Songkran outlays this year will be from savings at 36.8 per cent, followed by 28.9 per cent from salaries, 20.1 per cent from loans, and 14 per cent from bonuses and extra income.
Thanavath said the trend that people will borrow more for special occasions was a dangerous sign as it clearly showed that people’s incomes are too low to cover their enjoyment of such events.
Household debt is expected to increase to a worrisome point as it now accounts for 80 per cent of gross domestic product, he added.
Wachira Kuntaweethep, assistant director of the centre, said that as the baht has weakened in value, people would travel more domestically than during last Songkran. This year, only 5.9 per cent of respondents will travel abroad. In 2013, that figure was 18.9 per cent.
Average spending per capita for travel is about Bt49,172 during Songkran.
Major domestic destinations will be Chon Buri, Kanchanaburi and Rayong, followed by provinces in the North. Major destinations abroad are Hong Kong, Laos, South Korea, Myanmar, Japan and Singapore.
The survey also showed that spending for goods was likely to decrease. For instance, spending on luxury goods such as gold and jewellery would drop from Bt12,066 in 2013 to Bt10,870 this year, for durable goods from Bt7,771 to Bt6,059, for consumer goods from Bt4,568 to Bt3,624, and for alcohol from Bt1,577 to Bt1,513 per person.
But average spending for celebrations will increase slightly from Bt4,084 to Bt4,192, while that for making merit will rise from Bt2,414 to Bt2,796.