Thailand’s economic growth rate showed a relatively high GDP of 6.2% year-on- year in 2016, but started to decline the following year. It fell to 3.1% year-on-year in 2019 due to factors such as a decline in motor vehicle exports, a slump in manufacturing, and a drop in rice production because of drought. The COVID-19 pandemic hit Thailand when its economic situation had not fully recovered from the instability of recent years.

The state of emergency decree to combat COVID-19 came into effect on March 26, 2020, and the Thai retail market contracted by minus 29.4% year-on-year in April and minus 28.2% year-on- year in the following month of May. Both mixed merchandise and category specialist channels saw declines in sales, although mixed merchandise channels showed signs of a faster recovery. The World Bank announced a minus 6.5% GDP growth for 2020, and estimated a growth of 4.0% for 2021.

While GDP had increased by 22% from 2015 to 2019, household income declined by minus 3.4% and household expenditure declined by minus 2.0% over the same five-year period. The rate of decline in income was higher than the rate of decline in expenditure, leading to an increase in household debt. At the end of 2018, Thailand’s household debt to GDP ratio was as high as 78.2%.

Despite a drop in household expenditure, three categories still reported increased spending over the period of 2015 to 2019. The categories were Communication, Housing/ Utilities/Household Equipment, and Non- Consumption Expenditure (particularly in sub- categories such as Insurance and Interest Payment).

Greater Bangkok has long been a huge retail market even though the population growth has slowed down due to high land prices and cost of living. Household income in Greater Bangkok has fallen significantly since 2018, however household expenditure did not fall in tandem. Despite a slow economic growth and political instability, shoppers in Greater Bangkok continued to spend money, boosting the retail market.