New Year spending is projected to generate 109 billion baht of economic circulation, but people are spending cautiously as the economy has not fully bounced back, according to the University of the Thai Chamber of Commerce (UTCC).
A UTCC survey for the upcoming New Year season suggested a period of vibrant consumer spending.
A total of 109 billion baht is expected to circulate, representing a 3.2% increase, which reflects signs of an ongoing economic recovery in Thailand.
The survey was conducted between Dec 16-21, including 1,300 respondents nationwide.
Despite the upbeat forecast, Thanavath Phonvichai, president of the UTCC, said most consumers are still hesitant to spend freely as they perceive only a slight improvement in the economy. This cautious approach is evident in the stable volume of goods purchased compared to last year.
Sauwanee Thairungroj, advisor to the UTCC Council, said Thais are planning to spend on personal activities such as parties, religious donations, the purchase of clothes or shoes and buying gifts for others.
During this season, consumer spending is divided into two categories: travel and other activities.
Total travel spending is expected to reach 51.4 billion baht, including 5.47 billion baht for overseas trips and 45.9 billion baht for domestic trips.
Meanwhile, spending on other activities is expected to hit 57.8 billion baht, covering durable goods, consumer goods, parties and merit-making.
Popular items include gift basket purchases (26.5%), followed by expenditure on hosting parties, cash gifts, and purchases of alcoholic beverages.
In terms of sources of funds, the survey found 47% of respondents plan to use their salaries or regular income, followed by savings.
Notably, the proportion of people using savings has risen from 37.4% to 45.6%, indicating that many individuals find their salaries insufficient to cover their expenses.
"We expect the economic recovery in the first and second quarters of 2025," Mr Thanavath said.
However, he highlighted concerns about potential political uncertainties in the second quarter. If parliament is dissolved, it could hinder the approval of the 2026 fiscal year budget, potentially affecting the economy.
He added that if a stable recovery is seen in the second quarter, Thailand may need to gradually raise VAT to 8% as part of a broader tax restructuring to support the country's transition into an ageing society.
