Between 2019 and 2024, the total number of restaurants grew at an average annual rate of 106%, significantly outpacing 12% annual growth in both domestic and foreign tourist arrivals, according to the central bank, reports the Bangkok Post.
Last year, total retail sales excluding gold grew by 2.4% year-on-year, compared with an average annual growth rate of 2.7% from 1973 to 2019.
However, last year’s growth was primarily driven by large corporations, particularly hypermarket businesses.
“Sales growth among large corporations tallied 9.6% last year, whereas SME sales contracted 7.1%,” said Sakkapop Panyanukul, secretary of the Monetary Policy Committee (MPC).
As most restaurants are SMEs and employ a large number of people, closures in this sector can significantly affect public sentiment, he said.
Any support measures for the sector should be specifically targeted, said Mr Sakkapop.
The central bank slashed its forecast for foreign tourist arrivals for this year from 37.5 million down to 35mn, and from 40mn down to 38mn in 2026. The adjustment was attributed to a decline in Chinese arrivals.
The regulator projects 4.4mn Chinese tourists this year, down from a previous forecast of 5.1mn, while next year the projection is 6mn, down from 7.1mn.
Despite the decline in tourist numbers, tourism revenue is expected to increase from B1.4 trillion in 2024 to B1.5trn this year and B1.7trn in 2026. This growth will be driven by long-haul international visitors, especially from Europe, according to the MPC.
Mr Sakkapop warned that intensified competition from imported goods is posing a challenge for Thai SMEs in both manufacturing and services.
Consumer behaviour also shifted to online shopping, away from traditional merchants.
Due to a flood of imported goods, some Chinese products are priced significantly lower, sometimes up to 50%, compared with similar goods from other countries and Thai-made products, noted the MPC.
This contrast is evident in categories such as textiles and clothing, furniture, petrochemicals and steel.
To address the issue, Mr Sakkapop said relevant agencies should monitor the pricing and quality standards of imported goods, taking action against dumping when necessary.
The central bank reiterated there is no indication of a technical recession in Thailand this year, despite an expected slowdown in economic momentum in the second half.
GDP is expected to grow by 0.1% quarter-on-quarter in the third and fourth quarters, compared with 0.6% growth in the first and second quarters.