The business sector is calling for multiple government stimulus measures, especially tax incentives and a household debt reduction scheme, to revive the economy and give the public a New Year's gift.
Nath Vongphanich, president of the Thai Retailers Association (TRA), said the group sees public investment as a key driver for economic expansion in 2025. The government should expedite budget disbursement and public spending for 2025 to align with its targets, he said.
Efforts should be made to ensure a broad distribution of government funds through investments, procurement and stimulus measures to drive Thailand's economy forward, said Mr Nath.
To support small and medium-sized enterprises (SMEs) and counter the influx of cheap Chinese goods, the government should facilitate access to low-interest loans or funding sources, expand trade opportunities, and increase marketing channels for Thai product distribution, he said.
"Next year, TRA will implement the 'TRA GREAT' initiative by providing spaces within member retailers such as Makro, Lotus's, Central, Go Wholesale and Thai Watsadu for micro-SMEs to sell their products throughout the year," said Mr Nath.
Moreover, TRA wants government measures to stimulate consumer spending, such as the "Shop Dee Mee Khuen" programme, Easy e-Receipt, and incentives for private sector investments.
The association also proposes the government offer tax incentives for tourists.
"We could adopt a tax-free shopping scheme for tourists similar to Japan, which allows tax-free purchases exceeding ¥500,000 per day. In Thailand, we may begin with value-added tax [VAT] exemptions for purchases exceeding 5,000 baht per day in a single store," he said.
Mr Chaiyaporn says the government should prioritise easing loan problems in the household and SME sectors.
White paper
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said the chamber submitted a white paper outlining urgent economic stimulus measures to the government.
"The government should implement policies aimed at lowering the cost of living for people and expenses for businesses," he said.
Key recommendations include controlling the prices of essential goods and services, freezing electricity and diesel prices, and establishing an energy board.
In addition, the private sector recommends adjusting the minimum wage through the tripartite wage committee.
The chamber said the second phase of the 10,000-baht handout next year may be insufficient to stimulate the economy.
The group proposed a "multiplier measure" that could double the circulation of funds in the economy. Initiatives such as the Easy e-Receipt programme could inject an estimated 30-50 billion baht into the economy via roughly 1 million participants, without burdening the state budget, according to the chamber.
Addressing the debt overhang among individuals and SMEs is also critical. The government should adopt integrated monetary and fiscal policies alongside income redistribution to reduce inequality, said the group.
Proposed measures include debt moratoriums and extensions for housing, vehicles and SMEs, especially to ensure work-related vehicles like pickups are not repossessed. There is also an urgent need to reduce interest rates and improve access to credit, said Mr Sanan.
He emphasised the importance of enhancing the competitiveness of Thai businesses to better compete with imported goods. Essential strategies include ensuring fair trade practices, preventing market-damaging practices such as dumping, and maintaining product quality standards.
The chamber called on the government to attract both domestic and foreign investments. One suggestion is to designate Prachin Buri as part of the Eastern Economic Corridor, which could significantly boost investment in that area.
This initiative would bolster the competitiveness of key sectors such as food, tourism and wellness, said Mr Sanan, while also increasing the potential to become a hub for logistics and connectivity as well as education.
As Thailand enters its peak tourism season, the chamber sees a prime opportunity to leverage major festivals such as New Year's Eve, Chinese New Year and Songkran.
"If the government can promote Thailand's soft power by organising various events and ensuring that Thai festivals are included in the global calendar, it will enhance awareness among foreign tourists and attract high-potential visitors to travel to and reside in Thailand. This would generate substantial income for the economy," he said.
A drone light show is seen over the Wat Arun Buddhist temple along the Chao Phraya River, during the Vijit Chao Phraya 2024 festival in Bangkok on December 1, 2024. AFP
CONSUMPTION BOOST
Rakpong Chaisuparakul, senior vice-president at KGI Securities (Thailand), said the government is expected to announce a consumption package as a New Year's gift on Dec 12.
"In our view, the New Year package may include a 38-billion-baht cash handout for farmers, a 40-billion-baht cash handout for the elderly, and an Easy e-Receipt programme effective for the first quarter of next year," he said.
In addition, the market is keen to hear details of the Bank of Thailand's plans to ease nationwide household debt, which is due to be announced on Dec 11, said Mr Rakpong.
According to KGI, the measures are expected to cover 2.3 million loan accounts with a combined value of 1.3 billion baht, mainly in housing and consumer loans.
The assistance package will set a payment timeline of three years to allow debtors to waive interest rates and pay monthly instalments of 50% in the first year, 70% in the second year, and 90% in the third, noted the brokerage.
The government expects the measures to require a budget of 80 billion baht, of which 40 billion is funded by reducing the Financial Institutions Development Fund (FIDF) fee for banks to 0.23% of deposits, with the balance coming from money injected by banks.
Under these measures, banks can reduce their FIDF costs, but may need to contribute more money to raise the 80 billion baht needed for the assistance measures.
"We remain positive on Thai consumer plays, which entered their high earnings season in the fourth quarter, as well as the non-bank finance sector, which could benefit from the household debt bailout plan," said Mr Rakpong.
Bangkokians use the new section of a skywalk that links Central Chidlom department store with Chit Lom skytrain station. Apichart Jinakul
CAR TRADE-IN
The state plan to launch a car trade-in programme to stimulate purchases in the auto market is a good initiative, but will be difficult to translate into action, said Surapong Paisitpatanapong, vice-chairman of the Federation of Thai Industries (FTI) and the spokesman for the FTI's Automotive Industry Club.
The government must devise other new stimulus measures that can increase people's income, which is a crucial factor in their vehicle purchasing decisions, he said.
Mr Surapong said he wants to learn more details about the trade-in programme, recently announced by Industry Minister Akanat Promphan to deal with months of sluggish car sales in the country.
Authorities must clarify the car types, the age of used cars and price issues for the scheme, he said.
"This measure still depends on loans being granted by banks and car financing companies. If they don't want to participate, the scheme will not work," said Mr Surapong.
Banks' strict auto loan criteria amid high levels of household debt is a key factor causing the plunge in domestic car sales.
The slowdown caused the club to downgrade Thailand's total car manufacturing target for 2024 to 1.5 million vehicles, dipping from 1.7 million, which is the lowest target since 2021. From January to October, vehicle manufacturing fell by 19.2% year-on-year to 1.24 million units, the club reported.
He called on the government to craft appropriate solutions to debt problems so that banks and financing companies will relax their lending criteria.
"We want people to have more money and job security. This will lift their confidence, giving them more courage to spend money to buy cars," said Mr Surapong. "Many people want new cars, but they have to save money in a stagnant economy."
Wallop Treererkngam, executive vice-president of Suzuki Motor (Thailand), agreed with Mr Surapong on the need for measures to deal with household debt.
"If the government can ease debt problems, including non-performing loans among SMEs, banks will certainly grant auto loans," he said. "The result would be car and auto parts businesses would recover from the slowdown."
'CentralWorld x J.P. Toys Gallery present Merry Ville 2025' at CentralWorld until Jan 5. Photo courtesy of CentralWorld
LASTING MEASURES
Chaiyaporn Nompitakcharoen, managing director of the research department at Bualuang Securities, said the government should support the installation of solar rooftops for individuals and SMEs.
Thailand relies on imported oil for use in transport and electricity production, both of which are critical for the economy. When the oil price rises, the business and household sectors are stunted, he said.
Mr Chaiyaporn said the government should also offer soft loans for new businesses in trendy fields, such as those focused on the environment, social and governance issues, or sustainable development.
He added there should be state support for products from local communities, such as beverages and other items that are deemed outstanding, assisting in the development of brands to enable growth.
"These measures can increase the potential of SMEs, which are an important foundation for future growth. Lowering electricity costs by installing solar rooftops will help the government to reduce its support for Oil Fund subsidies," said Mr Chaiyaporn.
However, long-term solutions often lack political will from government officials, he said.
The government should prioritise easing loan problems in the household and SME sectors, said Mr Chaiyaporn.
"Commercial banks have acted on their own to address debt concerns, such as lowering interest rates and extending debt repayment periods. I would like to see government measures," he said.
In addition, it is vital to help people laid off because of the economic slowdown, the impact of the US-China trade war, and production relocation away from Thailand, especially in the automotive industry, said Mr Chaiyaporn. Singapore organised free training courses for employees in many professions to upgrade their skills, enabling them to have more stable jobs, he said.
Somchai Sittichaisrichart, managing director of SIS Distribution Plc, said the government should offer tax expense exemptions to corporations that bought solar systems and IT systems to support sustainability and digital transformation. Tax incentives can spur spending without a government cash injection, he said.
The VAT needs to be raised from 7% to 10% to increase state revenue, as VAT rates in neighbouring nations are 9-10%, said Mr Somchai.
Commuters take a ferry on the Chao Praya River amid high air pollution levels in Bangkok on December 3, 2024. AFP
A 'debt settlement market' for debtors and creditors to mediate debt via local agencies. Mr Chaiyaporn says that urgent measures the government should prioritise include solving loan problems in the household and SME sectors. VARUTH HIRUNYATHEB