The Finance Ministry is quickly preparing a proposal to the cabinet for soft loan and tax measures to stimulate investment, says Deputy Finance Minister Paopoom Rojanasakul.
Speaking after delivering the keynote address at the World Bank's annual meeting on the topic of "Unlocking the Growth Potential of Secondary Cities", Mr Paopoom said the government aims for inclusive and equitable economic distribution, aligning with its digital wallet scheme.
"The government's primary goal is to ensure money circulates within districts first. We do not want to see money flowing into Bangkok," he said.
Mr Paopoom said the current economic environment is problematic, and the government's task is to distribute money to the people as quickly as possible.
Budget disbursement has been accelerated, while state enterprise investments have exceeded their targets, he said.
The government previously used tax measures to promote tourism in secondary cities, allowing both organisations and individuals to deduct tourism expenses in these areas for tax purposes.
Over the past four months, Mr Paopoom said foreign tourists travelling to secondary cities increased by 38% year-on-year, and revenue from tourism in these cities grew by 50%, a result of this campaign.
The government's major stimulus package is the digital wallet scheme estimated at 500 billion baht, which is scheduled to be unveiled in the last quarter of this year.
The scheme is unlikely to significantly impact this year's economy, but should have an effect on the economy next year, especially in the first and second quarters, he said.
To ensure continuous economic activities, Mr Paopoom said the government is preparing additional stimulus measures, including a 100-billion-baht soft loan to be operated by the Government Savings Bank.
The details of this measure will be proposed for cabinet approval at next week's meeting, he said.
"The soft loan measure is considered large compared with the size of the economy," said Mr Paopoom.
"However, using credit measures to stimulate the economy carries lower fiscal costs compared with other measures."
He said the ministry is about to introduce tax measures to attract investment, which will be submitted to the cabinet within 1-2 weeks.
In addition, to increase access to formal credit for small and medium-sized enterprises, Mr Paopoom said the ministry is in the process of improving credit guarantee measures for the state-owned Thai Credit Guarantee Corporation (TCG).
The new method involves guaranteeing loans based on the borrower's risk rather than a portfolio.
The role of TCG will also change, as the previous method had banks recommend customers with insufficient credit to TCG, allowing them to purchase credit guarantee certificates before applying for loans.
Customers used these certificates to apply for loans at banks.
"The various new measures aim to support the economy during the period before the digital wallet funds are injected into the system," said Mr Paopoom.
The government aims for 3% GDP growth this year, he said.
The government's increased deficit has led to a rise in public debt levels to 64.3% of GDP as of May, but this level is still considered manageable by the Public Debt Management Office.
However, Mr Paopoom said if the International Monetary Fund's international standards are used to measure public debt, Thailand's level would be only 57%.
The gap is attributed to Thailand including certain debts as public debt while the IMF does not, such as the debt of state enterprises that the government does not guarantee, he said.
According to Mr Paopoom, to ensure inclusive and equitable national development, the Finance Ministry developed a tool called the Special Economic Fundamental Index.
This measures the distribution of development in each area at the village or sub-district level, unlike the index that measures GDP, which only shows a broad picture.
This tool can identify areas lacking infrastructure development or skill development among the workforce, enabling the government to use appropriate tools to address weaknesses in each area more accurately, he said.
