Thailand
Thailand: Association predicts flat Q3
Thailand’s retail industry is expected to edge up this year, but the growth rate will remain far behind overall economic growth.
According to Jariya Chirathivat, president of the Thai Retailers Association (TRA), the retail industry will still stay flat in the third quarter of this year and gradually improve in the fourth quarter, which is the high sales season for the retail sector each year.
“Thailand’s retail industry in 2018 is forecast to grow between 3.3% and 3.5% for the entire year, up from 3.2% in 2017, while the country’s overall GDP growth is estimated at 4.5% for 2018,” Ms Jariya said.
According to Ms Jariya, although the government is speeding up bids on a spate of infrastructure projects this year, it will take 6-8 months to see the impact from the investment in infrastructure.
She said the association also hopes that the government’s policy of local economic development and investment will help stimulate economic growth in second-tier cities.
The association reported yesterday that the country’s retail industry was almost flat in the first half of the year, due to weak consumption in upcountry areas.
The retail industry registered growth of 3.3% in the first half of this year against 3.2% for the whole of 2017 and 2.97% in 2016.
The lacklustre growth in the first half of the year stemmed from a flat showing in non-durable goods.
Durable goods (home electric appliances, electronics and construction materials) grew by 2.2% in the period against 2% in 2017, while semi-durable goods such as fashion and leather goods, small domestic appliances and sporting goods grew by 4.1% against 4.3% in 2017.
The growth was primarily boosted by the retail business in Bangkok, other major cities and tourist destinations.
But only 30% of retail stores are in Bangkok, with the remaining 70% in provincial areas where spending power is still relatively weak.
“Upcountry spending power remains poor, particularly in the cities that rely on the agricultural sector,” Ms Jariya said. “The rainy season, which came early, has also affected output and product prices in the farm sector.”
The TRA has once again suggested that the government come up with new measures to develop Thailand as a shopping destination in the region.
“Thailand is undeniably one of the most popular tourist spots for foreign tourists, but the image as a shopping destination is not yet enough,” Ms Jariya said.
“We propose the government develop a duty-free city to draw more tourists to shop in the country,” she added. “More importantly, the government should freely open the duty-free shop business to increase the number of duty-free shops in the cities, and many operators should be allowed to manage duty-free shops at airports, instead of having a sole operator manage the concession.”
The duty-free shop concession should be divided into smaller contracts based on product categories to provide greater choices for international tourists and enhance pricing competition and boost product offerings and quality, she said.
The association also suggested the government speed up the downtown VAT refund for tourists to stimulate tourism spending and make VAT refunds more convenient.
Source: https://www.bangkokpost.com/business/news/1514042/association-predicts-flat-q3