Thai retail sales full recovery seen in 2022, 2023

A 10% recovery was posted in 2021.

Retail sales in Thailand are expected to continue its recovery in 2022 and 2023, following the decline recorded in 2020, Fitch Solutions said.

In a report, Fitch said retail sales in the country have struggled to recover to pre-pandemic levels as tourist spending has yet to recover as well, along with the overall weakness of the Thai consumer.

But in 2021, retail sales grew by 10%, it noted.

“This is largely a result of a low base effect, with the full recovery from the 10% contraction in retail sales in 2020 forecast to come over 2022 and 2023,” the report read.

Fitch also said that consumer confidence in Thailand has been on a downward trend since January 2020 as consumers bear the brunt of the economic and social impact of the pandemic. 

The index hit 39.6 in August 2021, the lowest in 22 years but it was reversed in the last three months of 2021, reaching 46.2 in December 2021.

However, it dropped again in the first two months of 2022, reaching 43.4 in the country as the country faces a large number of COVID-19 infections due to the highly transmissible Omicron variant.

Thailand also started welcoming international tourists in 2022, with the further easing of entry requirements in March. Fitch said this will give a “major boost” to the Thai economy as tourists are forecasted to bring in $5.2b to the local economy, up from $700m when mass tourism was largely stopped due to restrictions.

“While this is still lower than pre-pandemic numbers (2019), we forecast that Thailand will bring in $76.2b from its tourism sector in 2025, surpassing the pre-pandemic numbers of $67.1b in 2019,” it said.