Thailand
Thailand: Retail rises on state stimulus
The Thai Retailers Association (TRA) expects the retail sector to grow in a range of 3-3.2% this year as the economy improves.
TRA president Jariya Chirathivat said positive factors driving retail growth include the government’s infrastructure investments, development of the Eastern Economic Corridor and special economic zones.
The increase of the fiscal budget by 190 billion baht is expected to stimulate the economy in both the second and third quarters.
Moreover, tourism revenue is growing and farmers’ incomes are improving after the fading of problems caused by drought. Crop prices are also moving in a positive direction, especially for rubber, palm, sugar cane and pineapple.
“The overall retail business in 2017 should show a slight improvement from 2016 with growth ranging between 3-3.2%,” Ms Jariya said.
Retail growth will be driven by non-durable goods, which should improve more than other segments as a result of the efficient disbursement of state funds to help folks in the provinces, with over 2 trillion baht being injected.
Ms Jariya said some business risks remain in 2017, such as high household debt, which will have a modest effect on consumption of durable and semi-durable goods, and non- performing loans among small and medium-sized enterprises (SMEs) because of reduced investment, higher unemployment and less loan approvals for SMEs.
In addition, increasing oil prices will result in higher inflation, which may put pressure on Thai household spending. Rising transport costs as well as exports and private investment still need to be closely monitored as they may change in line with the volatility of the global economy.
“The government should impose measures to build consumer confidence and promote a good atmosphere for shopping and investment in Thailand,” Ms Jariya said.
There should be activities to promote tourism in the low season with private tourism operators, hotels and retailers to stimulate spending among Thais and foreign tourists, she said.
The Tourism and Sports Ministry could also announce a Thailand Brand Sale for three months to attract Thais and foreign tourists to shop more, said Ms Jariya.
She urged the government to consider cutting import duties on luxury brand goods and launch clear measures to promote border trade.
The government should relax the opening of border checkpoints and provide greater perks such as the value-added tax refund for tourists from neighbouring countries, said Ms Jariya.
Last year, the TRA reported the Thai retail industry grew by 2.97%, close to the 3% growth projection and higher than 2.8% growth in 2015.
Source: http://www.bangkokpost.com/business/news/1198705/retail-rises-on-state-stimulus