Understanding the inflation outlook of Bangkok, the capital of Thailand, will help you see the forecast of Bangkok consumer spending in 2022. Then you can decide whether this country is the right destination to expand your business.
Inflationary pressures were rising during 2021, not only in Thailand but also in many countries around the world. The inflation was caused by the higher commodity prices, low base effects, and also supply chain challenges to create the localised shortages.
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Everyone believes that the rising CPI (consumer price index) is the key risk to Thai consumer spending. It is able to erode the citizens’ purchasing power. Thailand’s CPI reached 3.4% year on year only in April. But since then, the CPI has been declining. In July, it was just 0.45%.
Those percentages partly reflect the subsidies of the Thai government to ease the financial burden of people. The risk team of the country projects that the inflation is going to be about 1.0% for the whole year.
Thai Government Restrictions Affect Bangkok Consumer Spending
On September 1, the authorities in Thailand eased several restrictions in the provinces that were hardly hit by the pandemic. The restaurants were allowed to offer dine in service with some conditions. Many businesses in the shopping malls started reopening.
However, the governments didn’t remove the curfew and it remains in effect to the end of that month. Restrictions in Thailand remain moderate with the score of stringency index 55.1 out of 100 (in September 5, 2021). However, the restrictions are going to be eased further because of the vaccines.
Thai Government Supports for Better Consumer Spending
Stimulus measures of the governments specifically support Thai households and shield the consumer spending. Those measures have included the fiscal package that was released in three different phases. This included the assistance for workers and health related spending.
The supports were also given for the entrepreneurs and farmers who are affected by the virus, for businesses and individuals through the tax relief and soft loans, social security contributions, lower utility bills, and also measures to support the local tourism.
Understanding The New Bangkok Consumer Spending
In terms of the smaller expenses, there are more demands that are expected for the personal care items, groceries, as well as cleaning products, due to the movement restrictions that are being gradually lifted in Bangkok and many other cities in the country.
About 80% of Thai citizens are being much more mindful of the amount they spend during the monthly shopping. Only 28% of people in Thailand are comfortable to visit the restaurants and only 41% Thai citizens are comfortable to visit their family and friends at their homes.
Increase in Several Sectors
However, the demand for cashless payment facilities, e-commerce, and digital activities is increasing. The consumers find bigger comfort with online purchases and cashless payments. Netflix is getting much more famous during the pandemic.
Consumer spending in Bangkok is affected by the government, its restrictions, and its support to the citizens. Some sectors may rise slowly but some other sectors are increasing much more quickly. Read the market to know the best to do to expand and enter the market successfully.