Spending at the annual vegetarian festival is expected to be weak this month, forecast to shrink for the first time in 13 years because of the Covid-19 pandemic.
According to the latest survey by the University of the Thai Chamber of Commerce (UTCC), spending during the festival, which takes place from Oct 6-14, is expected to plunge by 14.5% this year to 40.1 billion baht.
Thanavath Phonvichai, president of UTCC, said this would be the first contraction in 13 years since the first survey was conducted in 2008.
He attributed the lower spending to the pandemic, which has weakened overall economic conditions, resulting in higher unemployment, a rising cost of living and reduced incomes.
"This year, Thailand's economy is expected to be weak for a second consecutive year as a result of the Covid-19 outbreaks," said Mr Thanavath. "Flooding is also aggravating the situation."
The university estimated the flooding will cause 10 to 20 billion baht worth of damage to the Thai economy, cutting GDP growth by 0.1-0.2 percentage points in the last quarter of this year.
Thailand's economy contracted by 6.1% in 2020 after gains of 2.3% in 2019 and an average of 4.1% in 2018 and 2017.
The government's planning unit, the National Economic and Social Development Council, on Aug 16 downgraded its economic growth forecast for a third time to a range of 0.7-1.2% this year from 1.5-2.5% in May, 2.5-3.5% on Feb 15 and 3.5-4.5% in November 2020.
The UTCC predicted Thailand's economy will grow by only 1% this year.
"The government needs to roll out more economic stimulus packages such as the co-payment subsidy scheme and the tax rebate scheme 'Shop Dee Mee Khuen' to spur the economy and consumer consumption in the fourth quarter," said Mr Thanavath. "The government also needs to continue fiscal policy measures from the end of the year to the Chinese New Year to drive the economy."
He said the country's GDP growth rate could bounce back to 6-8% next year if tourists return, the baht's weakness persists, and vaccinations cover a wider proportion of the population.