Thais are crowding shopping malls and department stores to stock up on black clothes, as they begin a year of mourning for beloved King Bhumibol Adulaydej that could end up dampening consumption in Southeast Asia’s second-biggest economy. The rush on retail outlets such Japan’s Uniqlo, Tesco Lotus and BigC is in sharp contrast to thinning crowds at Bangkok’s cinemas, coffee shops and usually bustling bars since the king died on Thursday after a long illness.
“Demand is overwhelming and black T-shirts were sold out within half an hour,” said a sales representative at Uniqlo’s flagship store in Bangkok’s upmarket Central World mall. “Many customers bought a dozen of them and we can’t limit the number of goods that they wanted to buy.” The government has announced a year of mourning, and is encouraging people to curtail festivities such as weddings and other events during the first 30 days, which could put a crimp in consumption.
But the government does not expect the economy to need any additional stimulus measures as a result of any slowdown in economic activity during the year ahead, Deputy Prime Minister Somkid Jatusripitak said on Wednesday. “There is no need for any stimulus measures,” he said. “There is nothing to worry about… we must be confident in our country’s potential.” Previously announced economic measures, including cash handouts for low-income people, should help maintain economic momentum, Kobsak Pootrakool, a vice minister in the Prime Minister’s Office, said after Tuesday’s cabinet meeting. Tourism Minister Kobkarn Wattanavrangkul does not expect much of an impact on tourism, but “the mood and tone might be different”, she told Reuters. “We’re still welcoming tourists to share this precious moment with Thailand.”
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Some hotels could see a drop-off in their events business. Ronnachit Mahattanapreut, senior vice president for finance at Central Plaza Hotel Pcl, told Reuters some seminars and conferences have been put off or cancelled and the company is negotiating with customers about postponing events. Karaked Sanamchai, manager at Sirichai Wholesale Centre, which supplies beer and alcoholic beverages in suburban Bangkok, said orders for alcohol drinks have dropped around 20-30 percent in the past week.
Bars in Bangkok’s Patpong, a popular night market and red light district, are largely empty these days. “Usually there is joy with music and fun, but now the atmosphere has turned to sadness. It’s never been like this before,” said bartender Kwanmongkol Buttima at a bar in the area. The media sector is also likely to take a hit. The broadcast and telecommunications regulator has ordered TV and radio stations to refrain from broadcasting entertainment programs during the initial 30-day mourning period.
Advertising spending will likely slow down from the fourth quarter into the first quarter of 2017, media analysts say. Cinema operators, such as Major Cineplex, may also be affected as Thais stick to home.
SIGNIFICANT TOURISM IMPACT
“To be honest, cancelling parties and celebration activities will hit the entertainment business and the tourism sector,” said a head of research at a Thai stock brokerage who declined to be named, given sensitivities around the monarchy. “The impact on tourism should be significant drag on the economy because tourism is one of a few drivers now,” he added. Thailand, with its beaches, Buddhist temples and infamous night life, had expected a record of 33 million visitors this year.
Tourism accounts for about 10 percent of Thailand’s economic output, and the industry has been a rare bright spot for an economy that has struggled for years as pivotal consumption and exports have been sluggish. “I don’t see an immediate impact on Thailand economic performance. The only drag would likely be in the tourism sector,” said Singapore-based Barnabas Gan of OCBC Bank, who is sticking to his 2016 GDP growth forecast of 3.2 percent.
“Given that there is no substantial negative impact on growth and fundamentals, there isn’t a need to engage in monetary easing,” he said. The central bank has left its policy rate steady at 1.50 percent, near a record low, since April 2015.
Despite a temporary impact on some activities, Pimonwan Mahujchariyawong, senior economist of Kasikorn Research Center, said she expected “there would be stimulative effects on activities, such as consumer goods and transportation related to the mourning.” She said she’s sticking to her forecast of 3.3 percent growth for 2016. Thailand’s economy grew 2.8 percent last year.
While black attire is one bright spot in the economy, other products are seeing a spurt of business as well. Sales of newspapers jumped with people keen to collect commemorative editions containing pictures and stories of the king. Wut Nontarit, editor at Post Today Newspaper, told Reuters daily sales have surged 50 percent to 300,000 since Saturday, the highest capacity the publisher has.