Call for stimulus as slowdown looms

Call for stimulus as slowdown looms

FTI urges support for flood-hit businesses

Commuters at the Siam skytrain station in Bangkok. The FTI is warning the Thai economy could face a retrenchment next year. (Photo: Pornprom Satrabhaya)
Commuters at the Siam skytrain station in Bangkok. The FTI is warning the Thai economy could face a retrenchment next year. (Photo: Pornprom Satrabhaya)

The Thai economy, which is struggling to recover from the impact of the pandemic and the Russia-Ukraine war, likely faces a new slowdown as a global recession is expected next year, says the Federation of Thai Industries (FTI).

The group advised the government to continue supporting the economy, although the Thailand Industry Sentiment Index increased in October for the fifth consecutive month to 93.1 points, up from 91.8 in September.

The federation urged the government not to be complacent about the country's economic recovery, which started when Thailand reopened late last year, as various negative factors remain.

"If the government does not implement new stimulus measures to further grow the economy amid a global economic contraction, the Thai recovery will lose momentum," said Montri Mahaplerkpong, vice-chairman of the FTI.

The World Bank warned in September of the possibility of a global recession next year after central banks raised interest rates in response to high inflation.

Thai exporters will be among the first entrepreneurs to bear the brunt as a result, said the FTI.

Many manufacturers have already been affected by this year's severe flooding.

The federation wants the government to continue the "Khon La Khrueng" co-payment scheme, one of the stimulus measures launched during the pandemic.

"This scheme directly boosted the economy because it created a multiplier effect of 1.5 to 1.8 times as it encouraged people to spend money to buy many products," said Mr Montri.

He also wants authorities to relaunch the "Shop Dee Mee Khuen" tax rebate scheme to bolster spending during festive celebrations next month, while adjusting the "Rao Tiew Duay Kan" (We Travel Together) scheme by increasing the number of room nights to 2 million to stimulate local tourism.

Mr Montri said these schemes are good for the economy, which has been significantly affected by floods in recent months.

Up to 14,995 of more than 60,000 factories surveyed by the FTI have been flooded.

"The floods caused damage worth 6-12 billion baht, more than our estimate of 5-10 billion," he said.

The FTI also called on the government to deal with expensive electricity bills, driven by high global energy prices, by reducing the national power generation capacity reserve.

The power reserve currently stands at around 51% of total capacity.

Analysts have stated a higher power reserve results in a greater tariff charged on power bills.


Do you like the content of this article?
COMMENT (65)

China warns against US House speaker's plan to visit Taiwan

China on Monday warned against a reported plan by US House of Representatives Speaker Kevin McCarthy to visit Taiwan this spring, urging Washington to abide by the one-China principle and refrain from doing anything that could affect bilateral relations.

30 Jan 2023

Indonesia to offer 10 oil and gas blocks in 2023, including in S. China Sea

JAKARTA: Indonesia plans to offer 10 oil and gas working areas this year, including a block in the South China Sea, amid efforts to boost energy production and make new discoveries, a senior energy ministry official said on Monday.

30 Jan 2023

At least 28 killed, scores injured in Pakistan mosque blast

At least 28 people were killed and more than 100 others wounded in a bomb blast at a mosque in a security compound in northwestern Pakistan, officials said. It was the worst such attack in almost 11 months.

30 Jan 2023