Retailers and domestic tour operators are waiting for new government measures to stimulate consumer spending next year after people's purchasing power significantly declined in the second half of this year.
A vendor in MBK shopping centre applies make-up as she waits for customers to buy her hair accessories. Many shops are seeing few customers while political tensions continue in Bangkok. THANARAK KHOONTON
The Thai Retailers Association (TRA) said it has so far seen no government policies that would make a direct impact on the retail industry next year.
Concerns about falling purchasing power and negative shopping moods due to the political turmoil have directly affected the growth of retail sales this year.
The 2013 retail sales growth projection will be cut to 8-9% from 13% forecast earlier.
Chatrchai Tuongratanaphan, an executive consultant to the TRA, said the 2-trillion-baht infrastructure investment scheme is expected to stimulate the overall economy, and the sector benefiting from it is property.
Retail businesses will start booming 8-9 months after the scheme's budget is disbursed.
Signs of a decline in the retail industry started in May. Consumer purchasing power for durable goods has grown, while sales for semi-durable goods have lagged and those for non-durable goods not expanded at all.
"This already shows that the purchasing power of grass-roots people has weakened," Mr Chatrchai said.
He said the agriculture and industrial sectors are the backbone of the Thai economy, and those sectors are not doing well.
In the past, they took turns slowing down and the healthier one offset the impact from the other.
For domestic tourism, Yutthachai Soonthronrattanavate, president of the Association of Domestic Travel (ADT), projects domestic tourism will total 90 million trips this year, generating revenue of 440 billion baht.
That is lower than the Tourism Authority of Thailand's projection of 129 million trips and 642 billion baht in revenue.
The political crisis is the key factor dragging down domestic tourism during this peak season. As well, the government has been paying more attention to international tourism than domestic travel.
This is different from many countries that have focused on strengthening domestic tourism.
"I think the current political unrest is worse than the situation in November and December 2008, when yellow-shirt protestors seized airports. Now we don't know how it will end or what will happen next. This directly affects small domestic tourism operators," said Mr Yutthachai.
The ADT wants the government to help small and medium-sized enterprises by giving them low-interest loans to help them survive the hard times.
There are 2,000 legitimate domestic tour operators, and the ADT expects 15-20% of them may become weaker or be out of business next year.