'Plan B' stimulus moves promised for third quarter

ECONOMY

While some critics claim the current economic stimulus package is too small to spur growth, the government has promised more measures under its so-called Plan B in the third quarter. According to Savit Bhodivihok, an adviser to Prime Minister Abhisit Vejjajiva, Plan B will focus on long-term measures that strengthen Thailand's competitiveness, including restructuring investment and developing logistics, mass transit, irrigation and alternative energy.

The plan will also cover upgrading agricultural products, seeking new export and tourism markets as well as tackling barriers to trade and investment.

Mr Savit said the government might need new borrowing and to run the budget deficit for fiscal 2010 to finance enhancing Thailand's competitiveness.

Finance Minister Korn Chatikavanij said recently that, for the fiscal year ending in September, the government could arrange financing for stimulus programmes of 621.44 billion baht.

A total of 437.9 billion baht in new borrowing would be used for the 2009 fiscal deficit, including the 115-billion-baht supplementary programme approved recently by the cabinet.

Another 183.5 billion baht could be raised from overseas to finance economic and social development programmes.

Mr Korn said the Finance Ministry currently anticipated needing to borrow 527.99 billion baht for the fiscal year, including 249.5 billion to cover the 2009 budget, 116.7 billion for the supplementary budget, and 29.79 billion in committed overseas-financed development programmes. The ministry also estimates that 132 billion baht in borrowing is needed to cover a revenue shortfall for the current year.Overall, the government has 93.45 billion baht left that could be used for a Plan B, he said.

Mr Savit said the government believes its Plan A will be effective to some extent in the short term in areas such as tourism, unemployment and helping small businesses improve liquidity.

The measures are expected to boost economic growth to 2% this year.

Mr Savit said he had already proposed that the prime minister authorise ministries to accelerate spending their budgets in the first quarter, as spending under supplementary programmes is expected to start by March or April.

State-owned enterprises and the private sector should also speed up spending to boost the economy, he said.