Additional stimulus package a possibility

Additional stimulus package a possibility

An additional stimulus package could be launched later this year to invigorate the economy after the third-quarter reading was weaker than expected.

The economic cabinet chaired by Prime Minister Prayut Chan-o-cha yesterday acknowledged that the third-quarter economic growth reading was softer than expected, said Kobsak Pootrakool, deputy secretary-general to the prime minister for political affairs.

For the third quarter, government spending, tourism and exports picked up, while private investment, particularly in some industrial sectors, remained tepid, he said.

But the two phases of the Taste-Shop-Spend scheme, which offered a 1,000-cash handout and 15-20% cash rebate for spending outside home provinces, were not taken into account. The scheme started in late September.

"The government is waiting for the National Economic and Social Development Council (NESDC) announcement on third-quarter economic figures, scheduled for Nov 18," Mr Kobsak said. "The economic cabinet's next meeting is scheduled for Nov 22."

The Bank of Thailand recently projected economic growth in the third quarter of 2.9% after gains of 2.8% in the second and 2.3% in the first. The figure was below the central bank's expectations.

Both the central bank and Fiscal Policy Office downgraded their growth outlook this year to 2.8%, though the government hopes stimulus measures will boost growth to 3%.

"The economic cabinet authorised related agencies to prepare in advance for additional stimulus measures in case they are needed," Mr Kobsak said. "The package will be ready at the next economic cabinet meeting."

Deputy Prime Minister Somkid Jatusripitak said earlier this week that a third phase of the Taste-Shop-Spend scheme is likely, while Finance Minister Uttama Savanayana said it would take a month to assess whether a third phase is needed.

Property measures

Charnkitt Dejvitak, vice-minister to the prime minister, said after a meeting with the private sector about property stimulus that the government had agreed to propose Mr Uttama talk with the central bank about easing the loan-to-value curbs by allowing 100% mortgages to be applicable to subsequent housing loans, in addition to first mortgages now.

The government's latest property stimulus and GH Bank's 50-billion-baht in low-interest loans are expected to help property developers release 35,000 unsold residential units from their inventories.

If the forecast holds true, real estate sales should grow 5-7% next year.

The government last month approved the new property stimulus package consisting of a property transfer fee cut to 0.01% from 2% and mortgage fee reduction to 0.01% from 1%. The fee reductions apply to homes priced at no more than 3 million baht.

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