Spending during the New Year holiday is expected to stay below 100 billion baht for the first time in 10 years, attributed to the fresh surge of Covid-19 infections.
According to the latest survey by the University of the Thai Chamber of Commerce (UTCC), spending during the New Year festive season is estimated at 91.5 billion baht, a significant drop of 33.6% from 138 billion last year.
"With the fresh round of infections, people are very concerned about the pandemic," said Thanavath Phonvichai, president of UTCC. "The majority of people surveyed during Dec 14-23 prefer to stay home."
According to Mr Thanavath, average spending is 9,876 baht per person, a fall from 15,615 baht per person year-on-year.
"In 2021, people would like the government to contain the Covid-19 spread, ensure political stability and take care of the cost of living," he said. "The government should not apply rigid national lockdown measures to curb the impact on the overall economy."
The university estimated an economic loss of about 7 billion baht per day or 200 billion a month if the government reintroduces lockdown measures across the country for one month. This would result in a decrease in economic growth by 1.5 percentage points, said Mr Thanavath.
The economy is likely to recover in the second quarter if the government succeeds in containing the outbreak, he said.
Yet the government needs to continue with stimulus measures to raise domestic spending and extend the "We Travel Together" scheme until the first quarter, said Mr Thanavath.
"If the stimulus measures fail to boost the economy in the first quarter, the government needs to inject more than 60 billion baht worth of additional budget in the first quarter to shore up the economy, especially for a tourism sector hard hit by a fresh surge of Covid-19," he said.
The UTCC forecast the economy to recover and post growth of 2.8% next year from a 6.3% contraction this year, driven by the availability of a Covid-19 vaccine, an export recovery and a return of foreign tourists.
The forecast assumes a foreign exchange rate of 30.40 baht per dollar, and a Dubai crude oil price averaging US$44.2 per barrel.
Next year's economy would also be helped by consumption stimulus measures, including the extension of the popular co-payment scheme, said Mr Thanavath.