Sommai cautions of lower Q2 expectations

Sommai cautions of lower Q2 expectations

Finance Minister Sommai Phasee has warned second-quarter economic growth could be lower than the first quarter’s 3% due largely to the tepid global recovery.

The ministry earlier thought the rebound would be V-shaped for the April-June quarter, but the fragile global pickup is causing doubts about the period’s growth rate.

Deputy Prime Minister MR Pridiyathorn Devakula recently predicted economic growth of 4% in the second quarter if exports managed to eke out zero growth.

Thai shipments fell by 3.99% year-on-year in the four months through April.

The Bank of Thailand has said a third straight year of declining exports is likely, compelling the central bank to revise down its 2015 economic growth forecast of 3.8%.

The revised figure is due next Friday.

Separately, the Finance Ministry is mulling the launch of new financial measures, with a focus on boosting incomes and alleviating the burden of drought-plagued farmers.

The new measures will be based on last year’s financial assistance to farmers.

Last year, the government distributed 51.5 billion baht in cash handouts to rice and rubber farmers after prices sank.

Under the scheme, farmers received a cash subsidy of 1,000 baht a rai with a maximum amount of 15,000 baht per farm household.

Of the total payout, 43 billion baht was given to rice farmers and the rest to rubber growers.

The Finance Ministry yesterday signed an agreement to borrow ¥38.2 billion (10.4 billion baht) from the Japan International Cooperation Agency to finance the second phase of the Red Line electric rail route linking Bangkok's Bang Sue district and Pathum Thani's Rangsit area.

The loan carries interest of 0.4%, a special low rate for projects that reduce impact on the environment.

Interest on a 28-billion-baht loan to fund the first stage of the Red Line stands at 1.4% because the special rate was unavailable at the time, said Theeraj Athanavanich, deputy director-general of the Public Debt Management Office. The loan for the second phase has a 20-year maturity with a six-year grace period.

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