New stimulus predicted to push growth above 3%
The new stimulus package is estimated to boost economic growth by at least 0.55 percentage points and help this year's growth to expand 3% or above, says Finance Minister Uttama Savanayana.
"We hope the country's GDP growth this year will achieve the National Economic and Social Development Council's expectation of 3% or higher," he said.
"The measures really can help, and the sooner the measures can start, the faster the results can be seen. The measures will go before the cabinet today and will be prepared immediately after approval."
The economic cabinet last week decided to pump another 316 billion baht into the economy through a new stimulus package. Some 50 billion baht will be newly allocated budget, while another 50 billion will come under the government's Pracha Rat welfare scheme.
Another 200 billion baht will be distributed through state banks to help ease interest and debt payment burdens for farmers and small businesses.
The measures include offering 10 million Thai travellers visiting tourism destinations outside of their home provinces 1,000 baht of spending money and a range of benefits, including a 15% cash rebate for up to 30,000 baht on their tourism spending. Another provides the 14.6 million holders of state welfare cards with an additional allowance of 500 baht per month this month and next.
Economic growth of 2.3% for the second quarter, below 2.8% in the first quarter, shows the world economy is affecting the Thai economy, said Mr Uttama.
Domestic consumption is ebbing, so the government can build up confidence by encouraging people to spend, preventing a broader effect, he said.
"We hope the world's economic titans will eventually negotiate and the Thai economy can take a step forward if the situation improves. We want to build some growth momentum," he said.
Mr Uttama said the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) can move quickly to relieve farmers' debts and help them with drought measures, as the bank has prepared for such moves for a while.
"The BAAC can roll out these measures by the final week this month, while tourism measures are expected to be introduced in the second week of next month," he said.
"Without any measures to shore up the economy, given the global situation, we don't know how deep the Thai economy will slump. If we let the economy run without any stimulus, it is unlikely to reach 3%."