Govt preps B50bn for stimulus

Govt preps B50bn for stimulus

Big cash injection eyed to fix ailing economy

Rice growers are the target of new economic stimulus measures. (File photo by Yongyuth Phuphuangphet)
Rice growers are the target of new economic stimulus measures. (File photo by Yongyuth Phuphuangphet)

The Finance Ministry will on Tuesday put forward for cabinet consideration a fresh economic stimulus package to inject at least 50 billion baht into the economy in the final quarter of the year to boost full-year economic growth after a poor third quarter.

Charnkrit Dejvitak, the vice-minister attached to the prime minister, said the package will be a "huge New Year present" to the public.

A source at the Finance Ministry said the measures target farmers and grassroots people who are in dire straits and will include financial assistance to subsidise harvesting costs and improve the quality of rice for the 2019/2020 rice crop, with some 4.31 million rice-farming households covering 3.4 million rai expected to benefit.

This measure will reduce rice farmers' production costs as their in-season crops are due for harvest this month and next, the source said.

The source also said that other measures include a one-year moratorium on principal payment for debtors of state-run banks and a project to offer low-interest loans to the public to stimulate spending.

The government also plans to allocate more money to the National Village and Community Fund which has members in more than 79,000 villages nationwide, the source added.

These latest measures are a response to the gloomy economic outlook recently announced by the National Economic and Social Development Council (NESDC), he said.

Last Monday, the NESDC reported the economy grew 2.4% year-on-year in the third quarter, driven mainly by increases in private and government consumption and investment, slightly improving from 2.3% year-on-year in the second quarter but lower than 2.8% in the first quarter.

Slowing economic growth in the third quarter prompted the government's think tank to yet again cut its GDP forecast for 2019 to 2.6% -- down from earlier projections of 2.7%-3.2%.

The lower projection was attributed to poor export prospects in light of the slowing global economy, the prolonged trade war and the baht's appreciation, while private investment was slower than expected this year due to the prolonged political struggle to establish a new government prompting a knock-on effect on public investment.

As another New Year gift, Mr Charnvit said the Finance Ministry is finalising details of a new type of tax-saving fund with long-term equity funds' tax deduction incentives due to expire at the end of the year.

He also said the cabinet recently approved the "Dream Home for New Year" programme, a 50-billion-baht mortgage scheme with a fixed interest rate of 2.5% for three years.

Mr Charnvit said the Finance Ministry is collaborating with the Thai Real Estate Association, the Thai Condominium Association, the Housing Business Association and real estate companies nationwide to roll out promotional campaigns for the project.

Last month, the government also 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%.

Finance Minister Uttama Savanayana wrote on Facebook on Sunday the Dream Home for New Year programme will give the public access to ownership of a house priced no more than 3 million baht.

The mortgage scheme began on Oct 24, with 5,441 applying for loans totalling 11.1 billion baht.

So far, a total of 3.93 billion baht worth of loans have been approved for 2,140 applicants, Mr Uttama said, adding he will meet the president of the Federation of Thai Capital Market Organisations to discuss the new tax-saving fund this week.

The minister noted confidence is the most important factor for the country's economic growth, and it is essential that all involved work together to steer the country forward.

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