The government is considering a new stimulus measure to boost private investment with the aim of reaching economic growth of 4% next year, says Finance Ministry permanent-secretary Somchai Sujjapongse.
The new measure, which is yet to be finalised, is targeted at encouraging the private sector to accelerate investment. However, this measure should not simply replicate previous tax incentives, he said.
Under the earlier measure, companies that started their investment before the end of 2015 were eligible to receive a two-fold corporate tax deduction on investment expenses incurred.
"The current growth of 3.2% for all of 2016 is not bad compared with 2.8% in 2015 and 0.8% in 2014. However, even though we are quite happy with the growth this year the Finance Minister [Apisak Tantivorawong] believes we have the potential to do better than this. He [Mr Apisak] wants to see the economy grow at its full potential, which should be at least 4% or even 4.5%," said Mr Somchai.
Mr Apisak had earlier told senior officials at the Finance Ministry that even though the global economy will grow at a near-zero rate that does not mean Thailand would have to grow at the same pace. Instead it should use its potential and find ways to make the best use of the country's strengths to shore up the economy.
"We have to think outside the box and find creative ways to push ourselves beyond the current domestic limitations and the sluggish global situation. We hope to see our economy expand by 4% from this year," said Mr Somchai.
The Fiscal Policy Office has been assigned to find measures to achieve the ambitious target.
Mr Somchai said the measure must be suitable for the economy and must efficiently stimulate the right sectors.
"We can't implement blanket measures, we must come up with a measure that benefits us in the short term as any measures could affect our tax revenue. We have to balance the two considerations carefully," he said.
Over the past two years, the government has introduced several stimulus measures with the aim of shoring up the economy. These include 60 billion baht allocated to Village Funds and 5 million baht dispensed to each tambon to develop projects as well as handouts to farmers.
Government investment is expected to accelerate in the second half, particularly for the planned 1.64-trillion-baht infrastructure projects.
Some 100 billion baht worth of spending from government stimulus measures has flowed into the economic system during the second half of the year. These measures have been implemented at a fast pace to shore up domestic investment and stave off a recession.
However, it seems that much still needs to be done to shore up private investment.
The National Economic and Social Development Board has predicted that private investment will expand by a mere 1.5% in 2016, while public investment will increase by 10%. Private investment remains a key factor in bringing about an economic recovery.