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Retailer group slashes 2015 growth forecast
Pitsinee Jitpleecheep
28/07/2015
The Thai Retailers Association (TRA) has nearly halved its 2015 sales growth projection to 3.2% from last year's 6.3% and 3.2 trillion baht.
It blamed the cut on the combined impact of mounting household debt, drought and slow state investment in megaprojects.
Those negative factors have kept consumer spending power low, and the trend is expected to continue for the rest of this year, president Jariya Chirathivat said.
On the back of a tourism recovery, the overall retail sector grew by 2.8% in the first half compared with GDP growth of 3%.
Foreign tourist arrivals to Thailand surged 23% as the number of locals who travelled and spent on shopping rose by 12%.
Weak consumer spending resulted in growth of 2.7% in durable goods sales, 3% in semi-durable goods sales and 2.8% in non-durable goods sales, which are the essentials of everyday life.
This also reflected a lack of improvement in the purchasing power of low-income consumers and farmers.
"More than 60% of the population have rising household debt, causing their purchasing power to shrink," Ms Jariya said.
Moreover, the impact of drought resulted in slow growth for some retail segments in the first half.
Sales at convenience stores and hypermarkets rose by 2.8% and 1.5%, respectively. Speciality store sales rose by 2.7%.
But supermarket sales grew by 8.5% as middle-class purchasing power began to improve, Ms Jariya said.
"In my opinion, the retail business in the second half will not be bright, as many economic measures such as infrastructure investment may not achieve what the government expects," she said.
Chatchai Tuongrattanaphan, an adviser to the TRA, said money spent on infrastructure would flow across the country's economic system within four months of release.
After the 1997 economic crisis, private investment did not grow at as high a pace as before, as foreign investors moved their production bases to other countries and imports and exports slowed down.
Therefore, government investment is the only engine available to drive GDP growth, Mr Chatchai said.
He said the government should boost the tourism and hospitality sector, given its capacity to drive the economy and generate foreign currency inflow.
Although the Thai tourism industry has a small share of GDP, the country has the potential to draw more foreign tourists with nature, arts and culture.
In the first half, arrivals to Thailand rose by 27.4% to 14 million. The full-year target is 29 million arrivals for tourism revenue of 1.4 trillion baht.
The government should consider reducing the import tax on luxury products to boost foreign tourist spending and attract influential Thai consumers to spend within the country, Mr Chatchai said.
"This would help Thailand to become a shopping paradise for tourists," he said.
bangkokpost.com
Pitsinee Jitpleecheep
28/07/2015
The Thai Retailers Association (TRA) has nearly halved its 2015 sales growth projection to 3.2% from last year's 6.3% and 3.2 trillion baht.
It blamed the cut on the combined impact of mounting household debt, drought and slow state investment in megaprojects.
Those negative factors have kept consumer spending power low, and the trend is expected to continue for the rest of this year, president Jariya Chirathivat said.
On the back of a tourism recovery, the overall retail sector grew by 2.8% in the first half compared with GDP growth of 3%.
Foreign tourist arrivals to Thailand surged 23% as the number of locals who travelled and spent on shopping rose by 12%.
Weak consumer spending resulted in growth of 2.7% in durable goods sales, 3% in semi-durable goods sales and 2.8% in non-durable goods sales, which are the essentials of everyday life.
This also reflected a lack of improvement in the purchasing power of low-income consumers and farmers.
"More than 60% of the population have rising household debt, causing their purchasing power to shrink," Ms Jariya said.
Moreover, the impact of drought resulted in slow growth for some retail segments in the first half.
Sales at convenience stores and hypermarkets rose by 2.8% and 1.5%, respectively. Speciality store sales rose by 2.7%.
But supermarket sales grew by 8.5% as middle-class purchasing power began to improve, Ms Jariya said.
"In my opinion, the retail business in the second half will not be bright, as many economic measures such as infrastructure investment may not achieve what the government expects," she said.
Chatchai Tuongrattanaphan, an adviser to the TRA, said money spent on infrastructure would flow across the country's economic system within four months of release.
After the 1997 economic crisis, private investment did not grow at as high a pace as before, as foreign investors moved their production bases to other countries and imports and exports slowed down.
Therefore, government investment is the only engine available to drive GDP growth, Mr Chatchai said.
He said the government should boost the tourism and hospitality sector, given its capacity to drive the economy and generate foreign currency inflow.
Although the Thai tourism industry has a small share of GDP, the country has the potential to draw more foreign tourists with nature, arts and culture.
In the first half, arrivals to Thailand rose by 27.4% to 14 million. The full-year target is 29 million arrivals for tourism revenue of 1.4 trillion baht.
The government should consider reducing the import tax on luxury products to boost foreign tourist spending and attract influential Thai consumers to spend within the country, Mr Chatchai said.
"This would help Thailand to become a shopping paradise for tourists," he said.
bangkokpost.com