Thais’ New Year spending expected to be highest in a decade, says UTCC

Thais’ New Year spending expected to be highest in a decade, says UTCC

Thais’ spending during the upcoming New Year celebration will be the highest in 10 years at 117.47 billion baht, thanks to lower fuel prices and private enterprise cooperating with the military regime to keep prices down, along with populist subsidies to farmers, according to the University of the Thai Chamber of Commerce (UTCC).

Despite the fact that the economy is still in the doldrums, with growth expected to end the year at only 0.8 per cent, year-end spending will be up by 5.1 per cent from 2013.

“As a result of the lowering of fuel prices in the fourth quarter, consumers will feel that they have more money and will spend during the New Year’s celebration. The tourism sector will greatly benefit as people have better sentiment to travel,” said Thanavath Phonvichai, director of the UTCC’s Economic and Forecasting Centre.

Moreover, it is believed that the government campaign to lower the cost of living and business costs, as well as the subsidy of 1,000 baht per rai to rice and rubber farmers, started to stimulate economic growth in the final quarter of this year.

Thanavath pointed out that Thais were able to save up to 10 billion baht this quarter on fuel, while the campaign to keep the cost of living down could save 15 billion baht. The farmer-subsidy project will inject 30 billion baht into the economy in time for year-end celebrations.

Based on a survey of 1,200 respondents, Thais will spend and travel more during the festive season because of higher confidence in the economic outlook.

Last year, New Year’s spending rose 5.6 per cent to 111.75 billion baht, while gross domestic product grew by 3 per cent in 2013.

Spending breakdown

This New Year’s, of the total spending of 117.47 billion baht, about 83.8 billion baht will go for travelling, 13.24 billion baht for consumption goods, 9.3 billion baht for making merit, 8.6 billion baht for partying, 1.57 billion baht for durable goods, and 750.7 billion baht for luxurious goods, the centre predicts.

As the cost of overseas travel has dropped, more people than a year ago are planning to go abroad. Thais will spend 53.28 billion baht on domestic travel and 30.69 billion baht overseas. On a per capita basis, they will spend an average of 10,425 baht on domestic travel and 80,126 baht on overseas journeys over the New Year holiday. Outbound tourism this season is lower for such destinations as Japan, because of the weakening yen, and South Korea. Of the respondents who said they would travel, 17.8 per cent said they would go overseas, while 15.7 per cent went abroad last year.

The poll found most consumers planned to spend money on the same things they did during last year’s New Year festival – parties, merit-making and buying consumer, luxury and durable goods.

Popular New Year presents are cash or gift vouchers, gift baskets, fruit baskets, luxurious goods, food supplements, durable goods, One Tambon One Product items, flowers, handicrafts, liquor, and clothes.

US$1 = 32.80 baht

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