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Thailand: Spending to drop by B50bn a month
Consumer spending is expected to decline by up to 50 billion baht a month as a result of the new outbreak of Covid-19 which also threatens to cause a further drop in the Consumer Confidence Index over the next three months, says the University of the Thai Chamber of Commerce (UTCC).
The longer the government takes to curb the transmissions, which also result from a new highly-contagious strain known as the UK variant, the more severe the impact will be on consumption, according to the UTCC.
“If the government takes 1-2 months to put the outbreak under control, spending will further decrease by 60-100 billion baht,” said UTCC president Thanavath Phonvichai.
Amid the volatile situation, UTCC is concerned the Consumer Confidence Index will not improve, with people’s spending expected to dip by 5-10%, or around 1-2 billion baht a day over the coming months.
The Consumer Confidence Index in March dropped to 48.5 from 49.4 points, following an increase in February.
People were still concerned over the pandemic mainly due to slow progress in rolling out vaccinations and the government’s earlier announcement to ban the splashing of water during the Songkran festival, said Mr Thanavath.
Consumers also feel the economy has not recovered yet despite the government launching many economic stimulus packages, especially financial handouts under the Rao Chana (We Win) scheme and the co-payment measure to help people pay for goods in an effort to boost spending.
If efforts to curb the new outbreak last for up to two months, economic growth in 2021 will be also affected.
“GDP growth may decrease by 0.3-0.5 % this year,” said Mr Thanavath.
If the new outbreak is prolonged, GDP growth is likely to stand at 3% or less.
Meanwhile, another survey by UTCC among businesspeople in March found sentiment had risen to 30.7 points, following declines over four consecutive months.
However, that was carried out before the latest outbreak, sparked by revellers at pubs in Bangkok’s Thong Lor area, said Sauwanee Thairungroj, an adviser to the UTCC council.
Source: https://www.bangkokpost.com/business/2097179/spending-to-drop-by-b50bn-a-month