However, spending would grow even more, by 5.7 per cent, if not for the drought affecting water-splashing festivities, Thanavath Phonvichai, director of the university’s Economic and Business Forecasting Centre, said yesterday.

He said the long holiday should result in a lot of spending but worries about the drought causing shortages of water had affected people’s spending sentiment.

Based on a survey of 1,226 respondents last week, 65.2 per cent planned to travel either domestically or overseas during the festive period, while 14.1 per cent will go back to their home towns but not travel around, and about 20.6 per cent will not go anywhere.

Among the 65.2 per cent who said they would travel, 90.6 per cent will do so within the country and 9.4 per cent will go abroad. Average spending by domestic travellers will be Bt4,601 per person, and Bt57,653 each by those going abroad.

“Most people will spend only on a necessary things such as travel expenses, food and making merit. The government’s tax-deduction measure to stimulate spending and travel will only increase expenditure a little because people are quite concerned about the economy and their future incomes,” Thanavath said.

Because of the persistent drought, people are also very worried that they will have to pay more for water with which to celebrate the water festival. Thus some Thais this year will not go anywhere, instead joining in Songkran festivities at places that are set up for people to splash water.

However, some respondents said they would join in celebrations while also going along with the government’s campaign to use small amounts of water.

Thanavath estimated that the government’s Songkran stimulus would create about Bt15 billion to Bt25 billion in spending, which would edge up economic growth by 0.05 percentage point.

Based on the 3.35 million Thais who have to pay income tax, people will be able to save about Bt3.5 billion to Bt4.5 billion in tax. This will help offset lower spending due to the drought.

Given the positive and negative measures affecting this year’s festival, Thanavath suggested that merchants carefully manage their goods orders and stocks as consumers might spend less than expected.

The survey indicated that sources of funds for people to spend during Songkran would be mostly their salaries, followed by special incomes, bonuses, and savings.