Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), said that this year’s Songkran festival would witness a big increase in the number of Thai and foreign tourists nationwide. However, he was worried that the spending would not be commensurate with the surge in participants.

Citing numbers from last year, when one-third of Thais had lost their spending power while spending by foreign tourists fell by approximately 6-7%, he said that he could not expect a big improvement this year either.

He explained that a high number of attendees could help boost revenue contribution to the economy from this festival. However, given the current slowdown, particularly in the domestic economy, where exports are weak, consumption is low, and businesses are shrinking, he believes people will celebrate the festival but in a frugal way.

Thailand’s Tourism and Sports Ministry announced on Tuesday plans to host a special grand celebration of the Songkran festival, the traditional Thai New Year.

The festival, dubbed “Yen Tua La Maha Songkran” or “Maha Songkran World Water Festival 2024”, will be extended from three days (April 13-15) to cover most of April.

Aside from commemorating UNESCO’s inclusion of Songkran on the list of the world’s “Intangible Cultural Heritage of Humanity” in December last year, the event aims to promote one of the country’s soft power pillars and elevate Songkran to the status of a global festival, comparable to other world-famous events such as Mardi Gras and Oktoberfest.

The government expects the 21-day celebrations to generate up to 52.5 billion baht in tourism revenue.

Praising the government’s efforts to promote the 2024 Songkran festival, Kriengkrai made the point that the country’s economy had long suffered from several structural issues, and that tourism growth alone would be insufficient to sustain the overall economy.

To address the country’s poor structure, he urged the government to take additional steps to ensure that small and medium-sized enterprises (SMEs) have easy access to financial support from the banking sector.

Payong Srivanich, chairman of the Thai Bankers Association, a member of the JSCCIB, proposed to the government a tax exemption for 5-7 years for SMEs that register as proper entities with the public agency.

This will give those SMEs time to adapt and improve to formal standards, allowing them to eventually access the financial support they require from the formal banking sector, he explained.

He said the method would assist the public sector in gaining access to the country’s database of SMEs in order to better regulate and build a fair tax-collection system.

Currently, more than half of Thai SMEs are classified as informal, and the public sector has no idea how to reach them, despite the fact that their businesses generate a lot of employment.

Meanwhile, Sanan Angubolkul, chairman of the Thai Chamber of Commerce, thanked the government for imposing a 7% value-added tax (VAT) on imported goods worth one baht or more beginning in May.

He said the decision would benefit small local businesses by reducing the influx of low-quality products into the country. He urged the government to strictly enforce inspection measures and use advanced tools to help prevent cheap products from being smuggled into Thailand.

The comments came as the JSCCIB meeting agreed to keep the country’s GDP growth forecast at 2.8% to 3.3%, despite other financial institutions, including the World Bank, recently lowering Thailand’s growth due to weaker exports.

With the global economy gradually recovering, the committee remains optimistic that purchase orders will increase during the second and third quarters of this year. However, they urged the government to increase supportive policies to assist the private sector in developing a new S-curve economy and upgrading Thai suppliers with green, digitisation, and automation concepts to keep up with the global trend.