Somkid urges agencies to maintain momentum

Somkid urges agencies to maintain momentum

Deputy Prime Minister Somkid Jatusripitak
Deputy Prime Minister Somkid Jatusripitak

The government is requiring state agencies to speed up their work despite the lull in activity during the formation of a new government, hoping to maintain economic momentum and attain 4% GDP growth this year.

Deputy Prime Minister Somkid Jatusripitak expressed worry over the economy in the first half this year as many economic agencies have been largely inactive during the transition.

"I asked all state officials to help the country keep working, helping the economy to match statistics from last year," he said.

Mr Somkid said this government should work to help the economy reach the 4.1% growth posted in 2018.

"I am worried economic growth this year may only be 3%, unable to reach the 4% level of last year," he said.

The National Economic and Social Development Council reported the economy grew 4.1% in 2018, the highest growth in six years.

The economy grew 1% in 2014, 3% in 2015, 3.3% in 2016 and 4% in 2017.

"There was a rising trend in investments on stocks, real investment, the local economy and tourism up to two months before the general election," said Mr Somkid. "However, from January until now, everything has slowed in terms of consumption and investment. The next government is expected to be established in June or July, but now the economy is like the movie Sleeping Beauty."

He said domestic consumption before the general election was unable to boost the economy as much as the previous general election.

Value-added tax in the first two months reportedly increased by 20%, delaying growth in March.

He said the government will propose to the cabinet to approve a stimulus package early next month. The Finance Ministry will conclude the details of the measures first.

He also called on the Industry Ministry to solve the problem of sugar-cane burning, as it has affected health and tourism in the North, especially in Chiang Mai and Chiang Rai, both major contributors to the nation's GDP.

The ministry plans to eliminate sugar-cane burning within three years.

"If there are no visitors to Chiang Mai next year, the impact will be drastic," he said.

The ministry is planning to ask the cabinet to subsidise 4% or 226 million baht of a 2-billion-baht loan to local farmers from the Bank of Agriculture and Agricultural Cooperatives in the fiscal year 2019 to 2020. The project aims to encourage farmers to use 4,000 units of sugar-cane cutters by 2022, up from 1,800 units.

In a bid to attract more farmers to join the project, the ministry plans to offer a 1% interest rate, as opposed to the previous 2%.

The ministry also plans to ask the cabinet to approve an 8.6-billion-baht budget for an industrial transformation project, while the government plans to support small and medium-sized enterprises to upgrade technology.

Mr Somkid authorised the ministry to join universities and the Labour Ministry in implementing the projects, which includes a training programme.

The Industry Ministry is also required to settle on establishing InnoSpace (Thailand) before the next government is formed.

InnoSpace Thailand, in partnership with Cyberport Hong Kong, is a startup incubator, supported by major companies like PTT Plc, which is allocating 100 million baht to the project's budget.

Founded in January 2019, InnoSpace Thailand is a venture between the public and private sectors with an initial budget of 500 million baht. Partners include PTT, Siam Cement Group, CP Group, ThaiBev and Bangkok Bank.

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