Kingdom predicts 4% economic growth amid uncertainty posed by pandemic

Kingdom predicts 4% economic growth amid uncertainty posed by pandemic

Arkhom: 7 million tourists this year
Arkhom: 7 million tourists this year

Finance Minister Arkhom Termpittayapaisith is confident of the kingdom's economic outlook, saying it will achieve 4% growth this year as forecast by several domestic and foreign agencies.

Speaking during a recent special lecture to senior public officials, Mr Arkhom said the World Bank, International Monetary Fund, Thailand Development Research Institute, the Bank of Thailand and the Fiscal Policy Office projected the 4% growth rate.

While this year's projection is higher than last year's 1% predicted growth, it is not considered high because the tourism industry has not yet made a full recovery, he said.

He said the 1% growth projection last year was thanks to robust exports that expanded between 15-20%.

A total of 7 million tourist arrivals are expected this year, compared to 700,000 last year, he said.

Tourist arrivals reached 40 million before the Covid-19 pandemic began and generated 2 trillion baht in income, he said.

However, the economic recovery still faces uncertainty due to Covid-19 and the rise of household and public debts, he said.

The government has issued two loan decrees to allow the borrowing of 1.5 trillion baht to mitigate the impact of Covid-19 and rehabilitate the economy, he said.

He said the government has also raised the public debt ceiling from 60% to 70% to accommodate higher borrowing and spending to help support economic recovery.

However, according to Mr Arkhom, the government will still need to reduce the size of the budget deficit, increase public spending efficiency and secure more tax revenues.

The Finance Ministry is considering taxing profits from cryptocurrency trades and imposing taxes on share sales as well as increasing efficiency in tax collections.

On soaring oil prices, Mr Arkhom said cutting the excise tax on fuel will be a last resort.

A proposal for the ministry to slash the excise tax on diesel to bring down the fuel price would cost the state about 2 billion baht per month, he said.

He said the state oil fund is being used to keep the diesel price below 30 baht per litre and it can seek more funds to continue the programme.

The ministry will consider cuts on excise tax when the borrowing reaches the ceiling, he said.

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