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B10bn SET matching fund in package
CHATRUDEE THEPARAT
The government is preparing another economic stimulus package aimed at cushioning the country from the impact of the global financial crisis and spurring economic growth next year.
Deputy Prime Minister Olarn Chaipravat said ministers would consider six measures including a 10-billion-baht matching fund by the Stock Exchange of Thailand and state financial institutions.
The first part of the matching fund worth 4-5 billion baht is expected to be established over the next few days.
Currently, the SET in co-operation with securities firms has set up five matching funds worth two billion baht that are ready to inject financial liquidity into the market.
Major listed firms are also being encouraged to buy back stocks amounting to 30 billion baht.
According to Dr Olarn, Finance Ministry today will seek cabinet approval to expand the deductible amount on taxable income for retirement mutual funds (RMF) and long-term equity funds (LTF) to 700,000 baht from 500,000 baht a year.
The measures could result in new funding totalling up to 110 billion baht flowing into the local stock market, he said.
To ensure that businesses have enough revolving capital, the Bank of Thailand has been assigned to persuade local commercial banks to extend loans equivalent to 400 billion baht, while state-run banks such as the Bank for Agriculture and Agricultural Co-operatives, and the Government Savings Bank would raise their lending to 1.15 trillion baht, from 1.1 trillion baht earlier.
Another measure to strengthen the Thai economy is to accelerate disbursement of government expenditures, which have been raised by 180 billion baht during the current 2009 fiscal year from the previous fiscal year.Additionally, authorities say they aim to speed up investment in government-sponsored megaprojects, for which the total investment budget has been raised to 350 billion baht from 250 billion, to help the economy.
Lastly, authorities pledge to enlarge co-operation between Asean and other countries, including Australia, Brazil, Russia, India, China, Japan and South Korea.
Dr Olarn said the government would stage more roadshows in Asia, Latin America, Africa and the Middle East in order to boost Thai exports, especially for leather goods, jewellery and furniture.
Siripol Yodmuangcharoen, the permanent secretary of the Commerce Ministry, said that world trade was expected to grow less than 6% next year, which would definitely affect Thai exports.
The ministry expects income from exports this year will reach US$175-185 billion. The projection for next year is for 3% growth.
Weerasak Kohsurat, the Tourism and Sports Minister, said the government was also poised to take steps to boost the sector.
The measures include an offering of 60 billion baht in loans to SMEs and tourism investment.
He said the Finance Ministry would consider additional measures to attract investment in tourism sector, and tax incentives to help tour operators.
Work on the Chiang Mai convention hall will be accelerated with bidding to be opened this year, while the Phuket convention hall would be reviewed for investment next year.
"If these measures are implemented, the Thai economy this year and in 2009 is likely to sustain growth by 5.1% and 4% respectively," said Dr Olarn. "I am ready to resign if I cannot complete my job."
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