Growth seen at 2% if vaccine target reached
The economy is expected to achieve 2% growth this year, if the government meets the target of 100 million doses within this year, said Don Nakornthab, Bank of Thailand's senior director for the Financial Stability Department.
The economy is likely to expand by only 1% if the government fails to meet the target, he said yesterday at an online seminar hosted by the Eastern Economic Corridor Office.
He added that the successful vaccination and herd immunity will also have an impact on economic growth next year.
He said the amount of money the government has injected to revive the economy via its fiscal and monetary measures following the Covid-19 pandemic account for as much as 20% of GDP.
Mr Don said there is still room for the government to execute fiscal measures to further prop up the subdued economy as the current public debt-to-GDP ratio is only 54%, compared to the ceiling of 60%.
He said that even if the ratio exceeds 60%, it is still considered to be low compared to those of other countries.
His chief concern about the outbreak's impact is the high level of household debt which is around 89-90% of GDP, soaring from 80% in the pre-outbreak period.
He added that the household debt threshhold set by the Bank for International Settlement is 85%. If the figure is lower than this, the economy will expand. If higher, the economy will be affected.
He said the policy rate at 0.5% is very low and is expected to remain low for many years.
The challenge of using monetary policy to stimulate the economy is how Thailand can push 2.3 trillion baht liquidity excess in the financial system into the economic system as much as it can.
Speaking at the same seminar, Pisit Puapan, executive director of the Macroeconomic Policy Bureau of the Fiscal Policy Office (FPO), said the planned 700-billion-baht loan will focus on stimulating the economy this year and next year.
The Finance Ministry forecast GDP growth this year at 2.3% on the assumption that 95% of the 1-trillion-baht emergency loan is spent. Thailand's GDP contracted by 6.1% last year.
Pongnakorn Pochakorn of the FPO said the number of poor this year has risen following the outbreak.
The number of poor people, whose income is below the poverty threshhold, has increased to 5.8 million this year, up by 1.5 million since 2019.
The poverty line is at 30,000 baht income per year and below.