The Thai economy has signaled growth in 2017, with satisfactory performance seen in exports and tourism that has caused many institutions to revise upward their GDP projections. However, KResearch is of the view that growth in consumer purchasing power has been concentrated in only some product categories, e.g., durable goods (automobiles), while consumer products (non-durable and semi-durable goods) remain fragile or have not clearly shown a satisfactory recovery.
On November 7, the Cabinet resolved to approve a new “Shop Chuay Chart” initiative bearing a tax break to run from November 11 to December 3. This incentive allows taxpayers a deduction of up to THB15,000 on the value of goods and services they purchase during those 23 days. KResearch believes that this measure will likely spur retail spending and also offer good opportunities to other segments such as wholesale suppliers and farmers, as well as boost employment in retail supply chains. Therefore, a more active shopping atmosphere is likely to flourish in retail trade that has otherwise been pressured by a weak recovery in purchasing power, particularly among the grassroots who are largest segment patronizing retail establishments.
Negative economic indicators that have impeded the spending mood include declining farm produce prices, rising unemployment, sluggish sales of non-durable/semi-durable goods as well as flooding in many locales between July-August and October-November.
We have thus assessed that this “Shop Chuay Chart” stimulus will likely boost spending in retail trade, which may reach a value close to the government's estimate of THB10 billion. Retail businesses are advised to be ready with their inventories and tax invoices; they should also intensify sales promotions more than last year to attract more consumers.
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