Spending sentiment during the upcoming Songkran festival is expected to remain tepid, mainly because of a sharp rise in oil prices ignited by the Russia-Ukraine war and relatively high Covid-19 infections in the country.
According to the latest survey conducted by the University of the Thai Chamber of Commerce (UTCC), spending during the upcoming Songkran festival is expected to plunge by 5.4% this year to 107 billion baht.
"People remain worried about the high cost of living, particularly as it is driven by rising oil prices and persistent Covid-19 infections in the country," said Thanavath Phonvichai, UTCC president.
"However, we still hope the war will not intensify, allowing global oil prices to cool down after Songkran. This will enable the economy to resuscitate in the second half of the year."
According to the survey, the most popular activities during the five-day vacation starting April 13 is travel and merit-making.
People are likely to opt to visit nearby tourist destinations to reduce travel expenses because of high oil prices, said Mr Thanavath.
The government is maintaining stringent social distancing measures during the festival, including a prohibition on water splashing and other celebrations associated with the holiday such as powder smearing. These activities have been deemed as increasing the risk of contracting Covid-19.
The country is still battling a high number of Covid-19 infections.
He called on business operators and the private sector to cap their prices or raise prices gradually to help alleviate the hardship of higher living costs.
Mr Thanavath said the UTCC remains optimistic the economy can manage growth of 3-4% this year, although many research houses have cut the country's economic prospects to only a 2.5-3% gain this year.