April roll-out for stimulus floated
2.4% growth in 2019 sparks worries
The government looks poised to introduce a fresh economic stimulus package after the economy slipped to a five-year low in growth last year and a possible contraction in the first quarter of this year.
Finance Minister Uttama Savanayana, on a trade delegation to Japan chaired by Deputy Prime Minister Somkid Jatusripitak, said the ministry is preparing a new round of economic stimulus covering tourism, consumption and investment to be proposed for the cabinet's approval by the middle of March for implementation in April.
Mr Uttama said tourism spending needs to continue, particularly through the Taste, Shop, Spend scheme, to entice people to travel more in Thailand.
The tourism sector employs millions and has been ravaged by the coronavirus outbreak, he said.
"The fourth phase of the Taste, Shop, Spend scheme needs to be potent enough to lure consumers to spend more while travelling," said Mr Uttama. "Similarly, investment stimulus measures need to be meaningful enough to draw investment."
He said state investment and 2020 budget disbursement need to be accelerated to help boost the country's fragile economy.
On Monday, the government planning unit National Economic and Social Development Council (NESDC) reported GDP growth slipped to a five-year low in the fourth quarter, attributable largely to poor exports and slow government investments.
The economy grew 1.6% year-on-year in the fourth quarter, decelerating from a revised 2.6% growth in the third quarter of 2019.
For production, the agricultural sector decreased mainly because of a reduction in major crop yields. The non-agricultural sector also decelerated as a result of a drop in the industrial sector, while the services sector continued to increase.
For expenditure, private final consumption expenditure increased at a slower rate, while gross fixed capital formation decelerated thanks to a fall in public investment. Government final consumption expenditure and exports and imports of goods and services declined, according to the NESDC.
Seasonally adjusted GDP growth expanded by 0.2%, on level with the third quarter of 2019.
For the whole year, the economy grew 2.4%, the slowest rate since 2014.
"Key risk factors that weighed on the economy in the fourth quarter and the entire year were falling exports and a sharp drop in public investment because of the delay in the passage of the budget for the 2020 fiscal year," said Thosaporn Sirisamphand, the NESDC's secretary-general.
"Natural disasters also affected production in the farm sector."
Given the negative factors, including the latest outbreak of the deadly virus, the NESDC on Monday cut forecasts for 2020 economic growth to 1.5-2.5% from 2.7%-3.7% made on Nov 18 last year, and export growth to 1.4% from 2.3%.
Wichayayuth Boonchit, deputy secretary-general of the NESDC, said the impact from the coronavirus outbreak and delayed 2020 fiscal budget could lead the country's economy to contract in the first quarter, but the figures are likely to recover in the second quarter once these factors were addressed and improved.
Lavaron Sangsnit, director-general of the Fiscal Policy Office, said the Finance Ministry is closely monitoring the economic situation and is ready to implement additional stimulus measures if needed.
The coronavirus outbreak is battering tourism, lowering the number of foreign visitors, particularly from China, for the January-to-March quarter, he said.
The Finance Ministry has already offered tax relief measures for tourism operators including a twofold tax deduction for expenses incurred from holding domestic seminars and training session along with a 1.5-times tax deduction for the renovation expenses of accommodation operators.
Cooperation from all parties is necessary to help Thailand overcome difficult times, said Mr Lavaron.
He said the economy's fundamentals remains strong, as indicated by subdued inflation, the current account surplus and low public debt at 41.3% of GDP.