Fetco urges state to simplify stimulus

Fetco urges state to simplify stimulus

The government should bundle different stimulus measures into one package and increase the budget deficit to address short-term challenges and enhance investor confidence, says the Federation of Thai Capital Market Organisations (Fetco).

The incumbent government has rolled out several measures to address the economic slowdown, but each one is out of sync with the others and different public organisations have announced their policies incoherently, said Fetco chairman Paiboon Nalinthrangkurn.

Another mechanism the government can implement is increasing its budget deficit for fiscal 2021 to spur liquidity in the economic system, Mr Paiboon said.

Thailand's economic fundamentals are strong enough to withstand a greater budget deficit, he said, while the low-interest-rate environment and relatively low public debt also warrant such a move.

The Finance Ministry is set to roll out a fresh stimulus package this quarter, one the ministry says is large enough to jump-start growth momentum.

The package will focus on giving money to consumers by lowering financial burdens, preventing employees from losing jobs and providing skills training to workers in tourism-related sectors, Finance Minister Uttama Savanayana said this week without providing in-depth details.

The economy grew by 1.6% year-on-year in the fourth quarter, decelerating from revised 2.6% growth in the third quarter of 2019.

For all of 2019 the economy grew by 2.4%, the lowest rate since 2014.

Lavaron Sangsnit, director-general of the Fiscal Policy Office, said the Finance Ministry has considered all measures to boost economic growth, including an increase in the public debt ceiling and accelerated fiscal 2020 budget disbursement, with all the disbursement capital expected to be completed within six months.

The main concern after fiscal 2020 disbursement is expedited is the process of spending and investing by state-owned enterprises and channelling the funds into the economic system, a process that takes time to carry out, Mr Lavaron said.

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