BANGKOK: Thailand’s Songkran festival - the country’s biggest annual celebration of water fights, homecomings and holiday spending - will be more subdued this year as rising costs weigh on consumers.
Spending during the April holiday is projected at 129.6 billion baht (US$3.95 billion), down 3.7% from a year earlier and marking the steepest drop since 2022, when the Russia-Ukraine war rattled the global economy, a survey by the University of the Thai Chamber of Commerce showed.
Many Thais are expected to cut back on spending and travel during the festival, mirroring softer demand seen in markets such as the Philippines during Easter, as fears of an oil shock linked to the Iran conflict weigh on sentiment.
The pullback reflects growing pressure on household budgets, particularly from higher fuel costs.
Thailand raised diesel prices sharply after ending a cap in March, with pump prices climbing about 48% as authorities struggled to fund mounting subsidy costs tied to surging global oil prices.
About 36.5% of respondents said they plan to spend less during Songkran, more than double last year’s 15%. More than half said they would skip traditional water festivities, while one-third do not plan to travel, up from 27.9% a year earlier.
A separate survey of businesses points to a similarly cautious outlook. More than 52% expect weaker activity, and nearly half anticipate lower sales and fewer customers during the holiday period.
"High oil prices are having the greatest impact on consumers,” said Thanavath Phonvichai, the university’s president. He expects consumer confidence - which rose to a nine-month high is February - to weaken in March.
The university estimates that higher diesel prices, now at 44.24 baht per liter, could cut consumer spending by as much as 97.5 billion baht. If elevated energy costs persist for months, the hit to consumption could weigh heavily on growth in an economy already facing headwinds from slowing tourism and exports. - Bloomberg
