Business operators are calling for the government to beef up measures to support companies and Thais to assist with soaring operating and living costs amid high economic uncertainty this year, mainly driven by rising oil prices as a result of US-Iran military tensions.
The price per barrel of crude oil could reach as high as US$80 this year, meaning many businesses and families will struggle with basic expenses.
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) held its monthly meeting on Wednesday and described global tensions, such as the US-Iran dispute and the US-China trade war, as the key concern for the economic outlook.
The JSCCIB suggested five measures to help local companies and Thais, said Kalin Sarasin, chairman of the Thai Chamber of Commerce.
"Global crude oil prices are expected to increase and affect both businesses and citizens," he said.
Support measures to reduce operating and living costs are a 5% discount on power bills and speeding up the process of value-added tax refunds for companies in the business sector within 30 days.
"The JSCCIB calls for contributions to the SSF [Social Security Fund] to be reduced to 2.5% from companies and employees for six months," Mr Kalin said.
The SSF legally requires contributions from three stakeholders: insured employees (5%), enterprises (5%) and the government (2.75%).
Moreover, the JSCCIB requested a reduction in housing transfer and mortgage fees to 0.01% for 12 months to stimulate the property market.
The panel called for a tax exemption on machinery imports for 12 months to help business operators with expansion and investment.
"These measures are aimed at offsetting myriad negative risks from geopolitical and trade tensions, resulting in an unfavourable world economy," Mr Kalin said.
Regarding US-Iran tensions, the JSCCIB forecasts global crude oil prices to reach $70 per barrel in 2020, but the prolonged situation will increase prices to above $80.
"If the prices reach $80 per barrel, business operators cannot afford this higher cost, which will limit their competitiveness," Mr Kalin said.
Supant Mongkolsuthree, chairman of the Federation of Thai Industries, said Thailand's exports to the Middle East include cars and food products, accounting for some 3.5% of total shipment value.
"Exporters should seek new export markets such as Asia and the US to offset potential lower shipments to Middle East countries," Mr Supant said.
The JSCCIB has high expectations that investment projects in the Eastern Economic Corridor will drive the country's economy and build up investor confidence.
Another hope is that the fiscal 2020 budget of 3.2 trillion baht, which parliament will consider, will be approved to begin budget disbursement.
"Thailand has only those two factors to mobilise the overall economy, and the tourism sector should be supported further to beef up GDP," Mr Kalin said.
The JSCCIB sees GDP growing 2.5-3% in 2020 amid continued risks and tensions from 2019.
For this year, the panel forecasts GDP growth of 2.7-3% with an export contraction of 0-2% because of the US-China trade war, Brexit woes and the baht's appreciation.
The private sector predicts 2019 inflation of 0.8-1.2%.