Srettha says Thai economy in crisis, needs major stimulus

Srettha says Thai economy in crisis, needs major stimulus

Tourists visit Wat Phra Chetuphon Wimon Mangkhalaram Rajwaramahawihan, also known as the Temple of the Reclining Buddha, in Bangkok. (Photo: Apichart Jinakul)
Tourists visit Wat Phra Chetuphon Wimon Mangkhalaram Rajwaramahawihan, also known as the Temple of the Reclining Buddha, in Bangkok. (Photo: Apichart Jinakul)

Prime Minister and Finance Minister Srettha Thavisin said on Thursday that Thailand's economy was in crisis, stressing the need to forge ahead with his government's controversial 500 billion baht (US$14.23 billion) digital handouts policy.

Speaking at a forum, Mr Srettha said the Thai economy, which relies heavily on tourism, was not in good shape, with fewer foreign arrivals than targeted, and he would be prioritising attracting foreign investment and addressing household debt.

"There needs to be big economic stimulus," said Mr Srettha.

His comments come days after the state-planning agency data said the economy grew at a much lower-than expected rate of 1.5% in the July-September quarter from a year earlier, the slowest pace this year, on weak exports and government spending.

His "digital wallet" policy, which entails handouts of 10,000 baht to 50 million Thais next year to spend in their localities, has come under criticism in recent months by economists and former central bankers over risks of it breaching financial discipline.

Government officials have in recent days been describing the economy as being in crisis, while noting the importance of going ahead with its signature stimulus plan.

Mr Srettha, a real estate tycoon and newcomer to politics, is aiming for average growth of 5% annually over the next four years for Southeast Asia's second-largest economy, which grew an average 1.9% over the past decade and has lagged regional peers.

In September, the Bank of Thailand (BoT) unexpectedly raised the key interest rate by a quarter point to 2.50%, the highest in a decade, saying growth and inflation should pick up next year. It will next review policy on Nov 29.

Debt management and solving issues of informal debt is a priority, Mr Srettha said, adding that an announcement will be on Dec 12 on ways to improve household debt. 

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