Thailand
Thailand: Modern trade sentiment still downbeat
Modern trade sentiment remained sapped in the third quarter as operators fretted about the economic slowdown and relatively low farm prices curbing household income.
Thanawat Phonvichai, vice-president of research at the University of the Thai Chamber of Commerce (UTCC), said the modern trade sentiment index stood at 50.7 points out of 100 in the third quarter.
The index was down from 51.1 points in the second quarter and 51.5 in the first quarter of this year, and from 52.1 in the fourth quarter of 2018.
The index rose in the last quarter of 2018 because of an increase in foreign tourist arrivals at the end of the year, New Year’s celebrations and relatively low oil prices.
Mr Thanawat said modern trade operators were worried that the continued trade war between the US and China, as well as the strong baht, would ravage exports, which are a major contributor to GDP, while weak crop prices and natural disasters would affect household income.
But most business operators are feeling upbeat about the fourth quarter, driven by the government’s Taste-Shop-Spend campaign, part of the 316-billion-baht economic stimulus package.
The programme comprises a 1,000-baht cash giveaway and a 15% cash rebate for spending of up to 30,000 baht for 10 million recipients aged 18 and up.
The cabinet on Oct 22 approved the second phase of the Taste-Shop-Spend cash handouts, running until the end of the year.
Under the second phase, participants still enjoy the same 1,000-baht cash handout, plus a cash rebate of up to 20%.
The cash handout needs to be spent using the Pao Tang app at participating shops in specified provinces within two weeks. Neither perk can be used in the recipient’s home province.
Mr Thanawat said most business operators called for the government to allow state-sponsored welfare smartcard holders to be able to buy goods at all retail shops, not just at the government’s low-priced Thong Fah Pracha Rat shops.
Modern trade accounts for 66.3% of the country’s wholesale and retail market, worth a combined 2.69 trillion baht in 2018.
The UTCC forecasts modern trade business to grow by 7.1% this year from 1.77 trillion baht in 2018.
In a related development, Mr Thanawat said the economy was believed to have bottomed out in the third quarter and would likely improve in the fourth quarter.
The UTCC forecasts the Thai economy to grow by 3.1% in the second half and by 2.8% for the whole year in line with the prediction made by the Joint Standing Committee on Commerce, Industry and Banking.
Surong Bulakul, vice-chairman of the Thai Chamber of Commerce, said consumer spending is expected to increase in the fourth quarter, elevating economic growth.
More part-time employment in the retail sector is anticipated, he said.
Source: https://www.bangkokpost.com/business/1782749/modern-trade-sentiment-still-downbeat