Thailand’s government will push for 3.5% economic growth this year and will seek to work more closely with the central bank to support small businesses, Prime Minister Paetongtarn Shinawatra said on Tuesday.
Commercial banks are profitable but lending to small businesses remains low, Ms Paetongtarn said, adding that improving credit access for small and medium enterprises would help the economy.
The government plans to hold discussions with the central bank to address the issue, she said.
Ms Paetongtarn’s comments come after official figures on Monday showed that fourth-quarter gross domestic product growth missed forecasts, expanding by 3.2%. The figure was short of the 3.9% growth expected in a Reuters poll but was still the strongest annual rate in nine quarters.
Full-year growth was 2.5%, below the Bank of Thailand’s target of 2.7%, the figures from the National Economic and Social Development Council showed.
“The economy grew in almost all dimensions in the fourth quarter, but private investment contracted,” Ms Paetongtarn said, adding that more investment was being encouraged.
The government has been pressing the Bank of Thailand to cut its benchmark interest rate. now at 2.25%, to spur more economic activity and growth. The central bank, which holds its next rate meeting on Feb 26, has said the rate is appropriate for current conditions.
Southeast Asia’s second-largest economy has lagged regional peers for several years as it struggles under high household debt and borrowing costs, and sluggish demand from China, which is also a key tourism market.
“The government’s (growth) forecast is 3.0%, we are pushing to 3.5%,” the prime minister said. “We can reach that goal and in the remaining months we will push.”