FPO: Next stimulus hinges on past outcome
Results of 3 measures will be weighed up
Results of the three government stimulus measures will be assessed to determine whether additional stimulus policies will be unveiled, says the Fiscal Policy Office (FPO).
The three measures concern tourism, consumer spending and state welfare for low-income earners.
The Finance Ministry and other related government agencies are discussing a strategy to manage the economy in the next phase of the pandemic, said FPO director-general Lavaron Sangsnit.
The government previously rolled out stimulus measures to entice Thais to travel as the tourism industry was crippled by international travel restrictions and poor sentiment as a result of the Covid-19 pandemic.
As part of the 22.4-billion-baht tourism stimulus package, the government subsidises 5 million nights of hotel accommodation at 40% of normal room rates, known as We Travel Together, with the subsidy limited to 3,000 baht per night for up to five nights. Tourists are responsible for the remaining 60%.
Subsidies for other services, including food, are capped at 600 baht per room per night. The subsidised tourist facilities must be outside the tourists' home provinces to qualify and are limited to 40% of actual expenses, with tourists paying the rest.
The government hopes that some of the money normally spent on overseas tourism by Thais, worth around 400 billion baht annually, will be spent for domestic travel as part of this campaign, Mr Lavaron said.
Another tourism stimulus measure is the 2,000-baht travel budget per person for 1.2 million medical personnel such as village health volunteers and sub-district health promotion hospital workers.
With the fourth-quarter high season for tourism and the We Travel Together campaign expiring on Oct 31, the government will consider whether an additional stimulus measure to shore up domestic tourism is needed.
Mr Lavaron said stimulus packages to rev up domestic tourism are vital to help sustain the economy during the Covid-19 crisis.
Foreign tourist arrivals are anticipated at 6 million this year, a significant decline from 41 million previously expected before the Covid-19 pandemic emerged, according to the National Economic and Social Development Council.
Revenue generated from the tourism industry makes up 18% of Thailand's GDP, with 12% or 2 trillion baht coming from foreign tourists. Thai tourists make up the remaining 6% with revenue worth 1 trillion baht.
The government will consider whether a consumption stimulus measure akin to the Taste-Shop-Spend scheme will be launched in a similar fashion, he said, noting that the aim is to boost consumer spending to shore up economic recovery.
The scheme, started in 2019, was an effort to boost consumption and tourism as 10 million Thais were entitled to 1,000 baht to spend via the Pao Tang app and a 15% rebate.
The government will also evaluate whether a new round of state welfare registration for low-income earners will be launched, Mr Lavaron said.
The FPO has prepared a threshold that will determine the criteria of those who qualify as low-income earners, he said.
If the government is not ready to open a new welfare registration for fiscal 2021, holders of welfare cards will still be eligible for welfare benefits, he said.
In April, the 5,000-baht cash handout scheme was launched for temporary workers, contract employees and self-employed workers not covered by the Social Security Fund, aiming at throwing a lifeline to these individuals after the government's virus containment measures disrupted business and caused many to lose jobs or income.
Some 22.3 million registrants applied for the cash handout, with only 15.3 million deemed eligible and 14.2 million receiving financial assistance. Total government spending on the scheme was 200 billion baht.