Agriculture, tourism and state spending will be instrumental in rebooting the economy in the third and fourth quarters, says Deputy Prime Minister Somkid Jatusripitak.
According to Mr Somkid, this month the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) is implementing a programme to bring technology to assist local communities and small and medium-sized enterprises (SMEs) in the farm sector.
The BAAC wants to help 100,000 local communities and 10,000 SMEs nationwide each year.
The bank is working with the National Village and Urban Community Fund Office to help Village Funds conduct a master plan on community development.
Mr Somkid said the government expects to allow domestic tourism in provinces with no coronavirus cases by the third quarter to help tourism-related entrepreneurs.
He said the National Village and Urban Community Fund Office will support members travelling more to their nearby communities.
According to Mr Somkid, the government's plan to splash 1 trillion baht, especially 400 billion baht slated for economic and social rehabilitation through projects aimed at creating jobs, strengthening communities and building infrastructure, will also help stimulate the local economy in the third and fourth quarters.
The government last month launched a 1.9-trillion-baht package, marking the biggest relief measure ever, to soften the economic blow.
Of the total, 1 trillion baht is for cash handouts aimed at virus-hit segments and farmers, public healthcare spending and economic and social rehabilitation; 500 billion baht is for the central bank's soft loan scheme for SMEs with credit lines of up to 500 million baht; and 400 billion baht is for the Corporate Bond Stabilisation Fund.
Kobsak Pootrakool, deputy secretary-general to the prime minister for political affairs, earlier predicted that the worst results would come in the second quarter because the virus has ravaged the country's tourism sector and exports, while lockdown measures caused a sharp drop in domestic consumption.
The state planning unit, the National Economic and Social Development Council (NESDC), reported that the country's GDP in the first quarter of 2020 fell by 1.8% year-on-year, compared with a rise of 1.5% in the fourth quarter last year. This was the first contraction since early 2014.
The agency attributed the contraction in the first quarter to decreases in total exports of goods and services, private and public investment and government final consumption expenditure. Even so, private final consumption expenditure grew, albeit at a slower rate.
Seasonally adjusted GDP fell by 2.2% compared with the previous three months.
The first quarter's dismal results prompted the NESDC to cut its economic forecast to a contraction of 5-6% this year, down from the 1.5-2.5% growth projection issued on Feb 17.
