Thailand: New Year spending to hit B103bn
Consumer spending during the New Year holiday is expected to reach 103 billion baht, pushed by the country’s continued economic recovery from the pandemic.
The estimated spending is an expansion of 20.1% from the 85.7 billion baht posted during the previous New Year period, the highest increase since 2007 and the first time in three years consumption exceeds 100 billion baht.
“Consumer spending is expected to be the most active in three years during the upcoming New Year festive season, boosted in part by the government’s recently approved ‘Shop Dee Mee Khuen’ tax rebate scheme,” said Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce (UTCC). “This will be good for the economy.”
On Tuesday, the cabinet approved a series of stimulus packages to increase consumer spending during the New Year period, including the Shop Dee Mee Khuen tax rebate scheme, under which consumers can claim up to 40,000 baht in tax deductions for goods and services purchased between Jan 1 and Feb 15.
The maximum spending eligible for tax deduction is split into two parts: 30,000 baht for products or services for shoppers who receive paper tax invoices, and another 10,000 baht for shoppers who ask for electronic invoices.
The measure does not cover the purchase of some products and services, including alcoholic beverages, cigarettes, cars, motorcycles, boats, hotel rooms, tour guide fees, utility bills, mobile phone bills, internet service bills and insurance premiums.
According to Mr Thanavath, the tax rebate scheme is expected to generate about 60 billion baht worth of spending, which would help drive the country’s economic growth in the first quarter of next year by 0.1-1.0 percentage points.
Saowanee Thairungroj, a member of the UTCC’s advisory board, said most of the spending will be slated for parties, overseas travel and merit-making. Spending on luxury goods and popular New Year gifts is predicted to increase from the previous year, she said.
Ms Saowanee said average spending is estimated at 33,944 baht per person, up from 30,634 baht in the same period last year.
Luxury products represent 45.8% of average spending, followed by travel at 18.4%, durable goods at 14.4%, parties at 11.3%, garments and shoes at 3.9%, liquor/wine at 3.5%, merit-making at 2.6%, and others for the remainder.
The survey found notably higher consumer spending on luxury products, travel, durable goods, liquor/wine and parties, with spending on luxury products increasing to 15,556 baht per person from 14,142 baht last year. Spending on travel rose to 6,262 baht from 5,445 baht, durable goods gained to 4,899 baht from 4,082 baht, parties increased to 3,835 baht from 3,335 baht, and liquor/wine rose to 1,173 baht from 656 baht in the previous New Year season.
In terms of requests from the government, most respondents cited tackling corruption, more consumer spending stimulus measures, a reduced cost of living and higher daily wages.
For 2023, people also expressed concerns about increased use of drugs, the economic outlook, the high cost of living, unemployment, debt and fresh Covid-19 outbreaks.