Spending during the festive season is expected to remain below 100 billion baht for a second straight year, hitting a 12-year low as growing concerns over the Covid-19 Omicron variant continue to undermine public sentiment.
The University of the Thai Chamber of Commerce (UTCC) revealed its estimate for spending during the holiday period of 85.7 billion baht, a 6% drop from 91.5 billion last year, which was itself a 33.6% dip from 138 billion in 2019.
"Spending is expected to be the lowest in 12 years," said Thanavath Phonvichai, UTCC president. "People's celebration sentiment has been dampened by the outbreak of the Omicron strain. People are likely to opt for parties in their houses or travel in areas with stringent measures to control infections."
According to Mr Thanavath, average spending is estimated at 30,634 baht per person, down from 39,123 baht the previous New Year period. Luxury products represent 46.2% of average spending, followed by travel at 17.8%, durable goods 13.3%, parties 10.9%, garments and shoes 4.9%, merit-making 3%, liquor/wine 2.1% and One Tambon, One Product items 1.8%.
He said the survey found consumer spending on luxury products and garments remained relatively strong, at 14,142 baht and 1,506 baht per person respectively, down slightly from 14,726 baht and 1,685 baht the previous New Year season.
"In 2022, people would most like the government to tackle economic problems and improve the country's administration, especially corruption problems," said Mr Thanavath.
In a related development, the UTCC expects the suspension of countdown celebration activities in Bangkok to lower money circulation by 30-50 billion baht. The drop is seen as producing a marginal impact on the overall economy.
He said the Thai economy is likely to start clearly recovering by the end of the second or third quarter next year.
The prediction is based on the assumption the government introduces only partial lockdown measures, said Mr Thanavath.
If harsh lockdown measures are implemented on a par with those imposed in 2020, the economic loss is estimated at 300-500 billion baht, affecting GDP growth by one percentage point, he said.
Mr Thanavath said the UTCC believes the Thai economy will fare better in the first and second quarter next year, mainly driven by the government's economic stimulus measures such as the "Khon La Khrueng" co-payment subsidy scheme, the "We Travel Together" tourism subsidy programme, and a tax deduction for individual taxpayers of up to 30,000 baht for the purchase of goods or services meant to increase domestic spending.
The government stimulus packages are expected to increase consumer spending by 130 billion baht in the first quarter next year and raise GDP growth by one percentage point.