More measures to support economy
published : 20 Jan 2020 at 18:00
writer: Chatrudee Theparat
Second-home buyers will find it easier to borrow, SMEs will get tax refunds sooner and foreign reserves will be prudently invested overseas.
These are among the latest batch of stimulus measures to battle worse-than-expected impacts of the world economy, according to economic ministers.
Kobsak Pootrakul, secretary-general to economic ministers, said Deputy Prime Minister Somkid Jatusripitak called a meeting with concerned authorities at the Finance Ministry on Monday morning to discuss measures to boost liquidity and stabilise the baht since the impacts of the global economic slowdown on the local economy were "beyond expectation".
"The meeting was held because the global economy affects the Thai economy more than expected. Pending the 2020 budget, additional money has not been injected into the economy. We must boost liquidity to support the economy," Mr Kobsak said.
According to him, the Bank of Thailand (BoT) will adjust its loan-to-value ratio so banks can lend more to buyers of first and second homes and stimulate the property sector as a result. The ratio sets the proportion of lending and down payments to prevent bad loans.
Effective on Monday, the Bank of Thailand will allow buyers of first homes worth less than 10 million baht each to borrow an extra 10% for furniture, Ronadol Numnonda told a briefing.
Buyers of second houses worth less than 10 million baht will be allowed to make a down payment of 10% if the mortgage on the first home has been paid off for at least two years, versus three years required earlier, otherwise a 20% downpayment will still apply.
Besides, Deputy Prime Minister Somkid ordered specialised financial institutions — state banks set up for particular purposes such as Bank for Agriculture and Agricultural Cooperatives — to relieve interest burdens for small and medium-sized enterprises while the Finance Ministry will speed up tax refunds for them.
To stabilise the baht, the Office of the Insurance Commission will allow life insurance companies to prudently invest abroad while the Export-Import Bank of Thailand will issue measures to support local operators in investing in other countries or import machinery to improve production.
The measures should boost the outflow of the baht, Mr Kobsak said.
Besides, the central bank was assigned to invest foreign exchange reserves in assets as long as the investments are legal and carry acceptable risks, he said. According to Bank of Thailand data, the reserves stood at $224.3 billion as of the end of 2019, ranking 12th in the world.
"The measures will be implemented for a few months before being reviewed. It will take quite some time for world economic problems to be resolved. The government will come up with more measures," Mr Kobsak said.