Thai economy forecast: 109 billion baht boost from consumer spending
Predictions for the new year indicate a robust economic circulation of 109 billion baht, driven by consumer spending, according to findings from the University of the Thai Chamber of Commerce (UTCC). While this suggests a positive economic trend, many individuals remain cautious with their expenditures.
The UTCC’s survey, conducted recently, highlights an anticipated 3.2% increase in spending compared to last year, pointing towards gradual economic recovery in Thailand. This survey gathered insights from 1,300 participants nationwide.
Despite the optimistic projections, the UTCC president, Thanavath Phonvichai, noted that consumers are still exercising caution in their spending due to perceptions of only a slight economic improvement. He pointed out that the volume of goods purchased has not significantly increased from the previous year, indicating a persistent wariness among consumers.
Sauwanee Thairungroj, an advisor to the UTCC Council, observed that many Thais plan to allocate their spending to personal activities such as parties, religious donations, clothing, footwear, and gifts during this festive season.
Consumer expenditure is primarily split into travel and other activities. Travel-related spending is projected to reach 51.4 billion baht (US$1.5 billion), with 5.47 billion baht (US$160 million) attributed to overseas trips and 45.9 billion baht (US$1.34 billion) for domestic travel.
Other activities, including buying durable goods, consumer items, hosting parties, and conducting merit-making, are expected to total 57.8 billion baht (US$1.69 billion).
Among the preferred purchases, gift baskets lead at 26.5%, followed by expenses for parties, cash gifts, and alcoholic beverages.
The study also revealed that nearly half of the respondents, 47%, intend to fund their spending through salaries or regular income, while a rising number, 45.6%, plan to dip into their savings. This shift suggests that many individuals feel their salaries are insufficient for their expenses.
“We expect the economic recovery in the first and second quarters of 2025,” Thanavath remarked. Nonetheless, he expressed concerns about potential political instabilities in the second quarter, which could impede the approval of the 2026 fiscal year budget, thereby affecting the economy, reported Bangkok Post.
He further suggested that should a stable recovery occur by the second quarter, Thailand might consider gradually raising VAT to 8% as part of a comprehensive tax reform plan to support the country’s transition into an ageing society.
