Economic stimuli in the works
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Economic stimuli in the works

Short-term boosters to shore up GDP

Customers look for foods and objects in Bangkok's Chinatown. (Bangkok Post file photo)
Customers look for foods and objects in Bangkok's Chinatown. (Bangkok Post file photo)

A number of short-term economic stimulus measures will be tabled at a meeting of ministers in charge of the economy called by Prime Minister Srettha Thavisin on Monday, in an effort to boost the country's lacklustre economic performance in the first quarter of the year.

Thailand's economy grew only by a paltry 1.5% in Q1 of 2024, according to figures released by the National Economic and Social Development Council last week.

As such, the government sees the urgent need to roll out a number of short-term measures that are mainly intended to support small- and medium-sized enterprises, as well as households at risk of defaulting on their debts, said government spokesman Chai Wacharonke on Sunday.

The government will roll out more long-term measures in the future, but these short-term stimuli need to be implemented as soon as possible, he said.

A source close said the PM met Deputy Prime Minister and Finance Minister, Pichai Chunhavajira, along with the governor of the Bank of Thailand governor and the secretary-general of the NESDC to discuss the focus of Monday's meeting.

Mr Chai said the PM was particularly disappointed by the 1.5% growth rate, especially given the effort the government had put into promoting the tourism sector, so he wanted the ministries and state agencies invited to the meeting to come up with new ways to stimulate economic activity in the short run.

According to the report released by the NESDC last week, Thailand's economy grew by 1.5% year-on-year in the first three months of 2024. The council now expects the country's economy to grow by 2-3% this year, which is slightly lower than its previous growth forecast of 2.2-3.2%. Throughout last year, the economy grew by an average of 1.9%, the report found.

Mr Srettha blamed the sluggish growth on the repeated delays in the deliberation and distribution of the 2024 budget, which caused deficits that reflected poorly on the economy, the spokesman said.

Finance Minister Pichai said the 1.5% growth posted in Q1 of 2024 does not reflect Thailand's actual economic capacity. Noting the figure is lower than figures reported by its immediate neighbours, he said the government needs to find more effective short-term stimuli to boost growth.

Deputy Prime Minister and Commerce Minister Phumtham Wechayachai said he had asked the permanent secretary for commerce to gather data for Monday's discussions, which will focus on the reasons for Thailand's slow economic growth in the first quarter. When asked about the kind of measures would be debated, he said the measures would be designed to boost exports, and help people cope with the higher cost of living.

Deputy Finance Minister Julapun Amornvivat noted that while the 1.5% economic growth rate reported by Thailand in Q1 of 2024 was the lowest in Asean, the figure actually exceeded the government's expectations. The slow growth in the first quarter was due to the sluggish export and industrial sectors, he said.

Fortunately, the growth was shored up by the impressive economic performance in the tourism and service sectors, said Mr Julapun, who said he remained optimistic that growth will pick up later in the year. However, he admitted that since the 2024 budget was passed just a few weeks ago, significant growth might have to wait until the third quarter of this year, instead of the next.

The PM called the meeting as he realised the government cannot wait for the 500-billion-baht digital handout scheme to have an effect on economic growth, a source said.

"We have to do something now ... without [the outstanding economic performance] of the tourism and service sectors, we would have encountered an economic recession," the PM was quoted as saying.

A proposal that will likely be considered is creatng a "war room" to monitor the economic situation. In its report, the NESDC urged the government to expedite the disbursement of the 2024 budget, speed up expenditure planning for the next fiscal year and assist SMEs by improving access to sources of funding.

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