'Don't mention the economy'

'Don't mention the economy'

Somkid frets about scaring off investors

Deputy Prime Minister Somkid Jatusripitak
Deputy Prime Minister Somkid Jatusripitak

Deputy Prime Minister Somkid Jatusripitak has urged the public not to discuss Thailand's economic problems too frequently, saying this could have a psychological impact on investor confidence.

Mr Somkid said that he was ready to explain the economic slowdown if the opposition raised the issue at the censure debate against the government expected next month.

His remark came after the National Economic and Social Development Council (NESDC) announced gloomy prospects for the economy on Mon.

The government economic think tank announced the economy grew by 2.4% year-on-year in the third quarter but cut its 2019 GDP forecast to 2.6% from an earlier projection of between 2.7% and 3.2%.

The agency also downgraded its export forecast for this year to a contraction of 2%, down from 1.2%.

Mr Somkid said the Thai economy depends largely on exports and external factors have significant impacts on the domestic economy.

"I don't think the issue is something one should complain about. The most important thing is confidence. If we keep talking about it, as the late former prime minister MR Kukrit Pramoj put it, this will make good things look bad, which will have wide repercussions," Mr Somkid said.

He also said that foreign investors are flying in for talks every week because they still believe Thai economic fundamentals remain solid.

Mr Somkid played down concerns over the NESDC's economic projections, suggesting that the figures were satisfactory amid the global economic slowdown.

The Thai economy remains stable and still has a chance of achieving year-end growth every year, with exports expected to go up slightly, he noted, adding that he is keeping his fingers crossed that exports will not go lower than they are right now.

Mr Somkid said the country's economic growth tends to improve in the fourth quarter and state enterprises are scheduled to spend 100 billion baht worth of investment budgets in the final quarter of this year, providing a buffer for the economy.

He added that value-added tax revenue began to rise in October as a result of increasing domestic consumption triggered by the government's Chim, Shop, Chai (taste, shop, spend) cash giveaway and cash rebate campaign.

The spending is part of the government's 316-billion-baht stimulus package, aimed at boosting economic growth to 3% this year after the economy lost momentum, mainly weighed down by sagging exports.

Mr Somkid said he has told the Finance Ministry to devise further property sector stimulus measures, after the government last month approved a new package consisting of a property transfer fee cut to 0.01% from 2% and a mortgage fee reduction to 0.01% from 1%.

The fee reductions apply to homes priced at no more than 3 million baht.

Don Nakornthab, senior director of the Economic and Policy Department under the Bank of Thailand (BOT), said the third-quarter economic growth of 2.4% was slightly higher than the previous quarter's 2.3%.

The BOT found that domestic growth slowed more than expected, particularly the external sector on shrinking exports and a slowdown in investment by the private and state sector, though domestic consumption was higher than estimated, he said.

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