Private sector urges BoT to ease policy

Private sector urges BoT to ease policy

Businesses have reiterated their calls for the central bank to ease its monetary policies to help revitalise the economy, which is projected to grow by less than 3% this year.

Jit Siratranont, a vice-chairman of the Thai Chamber of Commerce and chairman of the committee for the central region, said small and medium-sized enterprises (SMEs) in provincial areas are finding it tough to secure new loans amid tighter lending conditions for financial institutions and the Revenue Department's single financial account scheme.

The department introduced the single account scheme in 2016, aimed at encouraging accurate financial reporting by SMEs.

The central bank also required banks to consider only financial statements submitted to the department when vetting SME loans.

Mr Jit said the overall economy remains weak, with the local economy far from recovered.

"Only large, financially strong businesses can survive because they can set up their own property funds or issue debentures to raise funds when they need new capital to finance expansion," he said. "We thus call for the central bank to ease its monetary policy and lower its policy rate by 50 basis points to help stimulate the overall economy."

Sauwanee Thairungroj, president of the University of Thai Chamber of Commerce (UTCC), said the economy is dealing with myriad risk factors, including drought and rising household debt.

The university estimates that drought has already caused 9.8 billion baht worth of initial damage. The figure will rise to 18.9 billion baht if the drought extends for one month, or 37.4 billion baht if there is no rain for more than two months.

Mrs Suawanee said that while the drought damage is relatively low, it gravely affects the spending power of the grassroots.

Thanavath Phonvichai, vice-president for research at the UTCC, said the economy is likely to grow by less than 3% this year, given increasing risk factors such as weak consumer and business confidence and the drought's impact.

The explosions that rattled Bangkok yesterday will also affect Thailand's political stability and safety, he said.

Mr Thanavath said the new government must introduce stimulus measures as soon as possible, while income guarantees and infrastructure investment should also be revved up.

In a related development, Commerce Minister Jurin Laksanawisit scheduled the first meeting of the Joint Public-Private Sector Consultative Committee for Aug 14 to evaluate the impact of the latest move by the US to impose tariffs on Chinese import goods and brainstorm ways to boost exports amid the escalating trade war and global economic slowdown.

On Thursday, US President Donald Trump said he would impose a 10% tariff on US$300 billion of Chinese imports from Sept 1, marking an end to a truce in the trade war struck in June.

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