The Centre for Economic and Business Forecasting at the University of the Thai Chamber of Commerce estimates that the Chinese New Year festival will generate spending of about Bt47.7 billion, up 5.9 per cent over last year, despite some people's concerns
Thanawat Polwichai said the Monetary Policy Committee’s decision to maintain the Bank of Thailand’s benchmark interest rate at 2.25 per cent reflected the strong fundamentals of the economy, the rebound of the export sector projected for the current quarter, and the hoped-for recovery of the world’s economy. Any adjustment of interest rate at this time would have resulted in depreciation of the baht and the outflow of funds to other markets.
Thanawat said that now that it had declared an emergency decree, the caretaker government needed to ensure that the political demonstrations in Bangkok do not descend into violence, which would hurt the economy.
“According to our survey on people’s planned spending for the Chinese New Year, about 79.8 per cent of consumers will not travel during the festival. In addition, 38.9 per cent stated their opinion that the Bangkok shutdown campaign being conducted by the People’s Democratic Reform Committee would have a certain impact on their spending during the Chinese New Year,” he said.
If the shutdown campaign lasts until the Lunar New Year on January 31, about 38.5 per cent of respondents said they would celebrate at home instead of going out.
About 39 per cent believed the demonstrations would experience some violence, but not as bad as what happened in 2010, when a crackdown by the Democrat government of Abhisit Vejjajiva resulted in many deaths and injuries.
About 60 per cent of the respondents said the political atmosphere in Thailand was cloudy and confused, but not yet hopeless.
Thanawat said that this Chinese New Year, people would be more cautious with their spending, with less generous red envelopes for their children and relatives as well as less travelling. However, they would spend a certain amount on selected goods and offerings for praying to their ancestors.
He said people would spend 5-7 per cent less, about Bt700-Bt1,000 a day or Bt5,000-Bt10,000 a week on average. However, if there is any violence, the tourism sector will be negatively affected.
Thanawat forecast gross domestic product to increase by 3-4 per cent this year thanks to strong economic fundamentals. Foreign investors are not much concerned about the emergency decree in Bangkok and some provinces as seen from the rise of the Stock Exchange of Thailand and the MPC’s decision not to change the policy rate.