The Thai Retailers Association has revealed a concerning situation, with the retail confidence index in June plunging to a new 42-month low, reflecting extremely fragile purchasing power. Meanwhile, businesses and investors are postponing investments, awaiting clear and concrete government policies. The association has submitted two urgent proposals to the new government to accelerate economic recovery.
Nat Wongpanich, President of the Thai Retailers Association, stated that in the first half of the year, the business sector faced pressures from various fronts, including political uncertainty, slowing purchasing power, and external factors such as the still-not-fully-recovered Chinese tourist market, which is a key market for Thailand.
Additionally, geopolitical risks require close monitoring, especially the U.S. tax policy, where Thailand must negotiate to reduce import tariffs below 36% to remain competitive with neighboring countries such as Vietnam, Malaysia, and Indonesia, without negatively impacting small operators in sectors facing liberalization. This affects the competitiveness of Thai businesses and employment.
Furthermore, conflicts in the Middle East and the situation on the Thai-Cambodian border also affect consumer spending and overall economic confidence.
The retail business confidence index in June declined across all components and regions, including spending per receipt and spending frequency. It is expected to continue declining into the third quarter, reflecting consumers’ cautious and weak purchasing power.
Although there are positive signals from the formation of the new cabinet, political stability remains unclear. The private sector is waiting for efficient economic policies and tangible recovery measures to be implemented in the second half of the year.
Therefore, the association proposes that the government urgently inject funds into the system, utilizing an initial budget of 115 billion baht from the total 157 billion baht budget framework to stimulate community economy and tourism. The remaining 40–50 billion baht should be allocated to support SME operators and boost grassroots purchasing power.
Supporting SMEs is urgent as they account for over 90% of all businesses and cover 50–70% of employment in the economy. Low-interest loan measures can help stabilize the situation.
The most important proposal is to push forward the “Easy e-Receipt Phase 2” project from September to December, proposing to increase the spending limit to 100,000 baht, which is expected to generate more than 100 billion baht in system liquidity, up from about 70 billion baht previously.
Another key initiative is to promote Thailand as a “Shopping Paradise” by piloting a value-added tax (VAT) refund at stores immediately for purchases starting at 3,000 baht, and reducing import duties on fashion and cosmetic products from the current high rates of 20–30%. This aims to improve competitiveness with other countries in the region and reduce incentives to buy from the gray market.
Other proposals include considering the establishment of “Free Tax Zones” in major tourist provinces like Phuket, organizing nationwide discount festivals, and extending the visa duration for Russian tourists from 30 to 45 days to attract quality tourists.
Meanwhile, the association supports government actions to crack down on foreign nominee businesses, especially in restaurants, hotels, and supermarkets, as well as strict control of low-quality imported goods. The association views this as the right direction and urges continued serious enforcement.