Children this time of year may dream of sugarplum fairies, but auto executives must surely fantasize about going to sleep and waking up in Thailand.
Thailand has become a tropical retailer's paradise, where people seem to spend with abandon. Sales of beer, soft drinks and motorcycles have all climbed to record levels this year. Car sales in October rose a dizzying 37 percent over the month a year ago.
"Cars are selling very well," said John Bonnell, executive director of Automotive Resources Asia, a market research firm in Bangkok. "Consumer confidence is way up."
Thailand's consumer spending boom is in its third year and shows little sign of slackening. According to the central bank, retail sales to Thailand's 61.2 million consumers rose in the second quarter, to a record 304 billion baht (US$7.6 billion). With consumer financing readily available and household debts still manageable, consumers are gradually reducing Thailand's traditional dependence on exports for growth, even as demand for Thai exports is recovering.
"Consumer spending is one of the major drivers of economic growth in Thailand," said Daniel Lian, an economist at Morgan Stanley in Singapore. Morgan Stanley estimates that Thailand's economy will expand 6.3 percent this year, driven by a 5.6 percent rise in consumption.
Lian and other economists credit the trend in part to the fiscal policies of the government of Prime Minister Thaksin Shinawatra. The consumer appetite, already rekindled by Thailand's recovery from the financial crisis of 1997 and 1998, has been stoked to white-hot intensity.
Thailand is far from alone in wanting to overcome a dependence on exports. Overcoming export addiction has become a sort of mantra among Asian policy makers, especially those chafing at the political pressure from their biggest customer, the US. While most recognize that the American trade deficit has left the dollar far overvalued, they fear giving in to Washington's demands that they let their currencies appreciate for fear of losing their export competitiveness.
Thailand and other Asian exporters hope to replace demand from the US with demand from home and neighbors. The ASEAN recently agreed to form a European-style economic community by 2020, creating a market of 530 million people.
With public savings rates high, Asian governments had typically recycled deposits into the economy through banks, which tended to lend to corporations, building export capacity. The Asian financial crisis crippled these banks, leaving them unable or unwilling to lend to companies that in many cases are still deep in debt.
"Individuals weren't really touched by the bubble and the financial crisis," said Pedro Rodriguez, chief executive of Cetelem Thailand, a consumer credit subsidiary of BNP Paribas.
Thaksin also recognized the potential of the Thai depositor as an engine of growth. When he came to power in early 2001, he adopted policies that encouraged consumer spending, including urging government-owned banks to begin lending to households.
He also instituted policies to help the less-affluent utilize overlooked assets like rice paddies, turning them into collateral for small-business or consumer loans. Other programs promote ownership of homes and computers.
"These schemes are creating capital and assets for households," Lian said. In turn, they promote spending.