Despite concerns over toxic haze, Thais are expected to spend more during Chinese New Year, according to the latest spending survey by the University of the Thai Chamber of Commerce (UTCC).
Thanavath Phonvichai, vice-president for research at the UTCC, said the university forecasts spending by Thais during the festival, which starts Feb 3, to increase by 2.7% to 58.4 billion baht this year.
"The dust problem should not affect consumers' decisions on spending and travel during the festive season," he said. "The survey found that spending sentiment remains cautious, as people are still concerned about economic prospects."
Mr Thanavath said the ultra-fine dust particles shrouding Bangkok and surrounding provinces are estimated to cause a loss of 8-10 billion baht to the overall economy, as people are opting to stay home and Bangkok's schools were ordered to temporarily close.
"If unresolved, the haze problem will adversely affect circulation in the economic system and alter consumers' spending behaviour," he said. "Online purchases may see the most benefit."
The Bank of Thailand warned Thursday that the toxic haze would have an effect on the country's lucrative tourism industry if prolonged. The central bank said hotel occupancy rates remained robust.
The Bank of Thailand is monitoring the government's measures to deal with the pollution, said Don Nakornthab, senior director of the economic and policy department.
Tourism income accounts for 20% of GDP and is a major driving force for economic growth amid global economic uncertainty.
In December, foreign arrivals totalled 3.84 million, up 7.7% from a year earlier. The number of Chinese tourists increased 2.8% in December, the first rise in five months since the boat accident that claimed the lives of 47 Chinese visitors in Phuket last July.
The growth was attributed to the launch of new direct flight routes to Thailand, together with the waiver of visa-on-arrival fees implemented since mid-November. Seasonally adjusted, the number of foreign tourists increased from the previous month.
Tourists arrivals expanded by 4.3% in the final quarter last year, improving from 1.9% the previous quarter. Foreign visitors surged 7.5% to 38.2 million last year, with tourism income growing 9.7% to 2 trillion baht, said the Tourism and Sports Ministry.
Mr Don said exports will likely see low growth levels this year, slowed by the US-China trade spat.
The central bank in December slashed the forecast for payment-based 2019 export growth to 3.8% from 4.3% predicted in September.
