Economic think tank says shopping stimulus will only help in the short-term

The research division of Kasikorn Bank says while the government’s planned shopping stimulus has its advantages, the benefits will only be short-term. The Kasikorn Research Centre points out that the scheme, which it’s hoped will run from October 23 to December 31, will only provide a temporary boost to the economy.

The stimulus measure, which is being put to the Cabinet on Monday, will offer shoppers a co-payment of 3,000 baht each, with a maximum daily payment of 150 baht. The payment is intended to subsidise consumer purchases, with the exception of lottery tickets, flight and accommodation bookings, alcohol and tobacco.

Nation Thailand reports that, according to the Kasikorn Research Centre, a take-up by 1.85 million consumers should generate around 55.5 billion baht for the economy. Should the number of consumers rise to 4 million, the figure would be more than twice that, at 120 billion baht.

The centre also says that without the scheme, total credit card payment for 2020 is expected to decrease by 12%. If the scheme is successful, that should improve to 11%. Retailers are expected to benefit the most, with the scheme also expected to boost the sale of items currently experiencing a fall in demand due to the current economic crisis.

However, the centre points out that the stimulus package is only a short-term solution, adding that most retailers who will benefit will be large corporations and not small businesses. It will also not be worth while for production lines to resume full scale operations, as any increase in demand for consumer products will only last for the 2 months the scheme is in operation.

SOURCE: Nation Thailand