Kittiratt rules out short-term stimulus to rev up economy
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Govt, private investment and domestic consumption to be drivers
The government is not planning any short-term economic stimulus, while focusing more on public and private investment and domestic consumption to prop up the economy in the latter half of this year.
This will be discussed at a meeting with Prime Minister Yingluck Shinawatra today.
Finance Minister Kittiratt Na-Ranong said the government would not inject money into the economy for short-term stimulus in the second half of 2013. However, the Thai economy would be supported during the period of the global economic slowdown.
“The government’s projects will all have long-term economic impact. We don’t want to use economic stimulus packages like those in the past, such as Thai Khemkhaeng, which was not worth the high budget,” he said.
About Bt350 billion was invested in more than 40,000 projects across the nation under that scheme. More than 80 per cent of the projects were valued at less than Bt5 million.
Kittiratt, who is also a deputy prime minister, said this year’s economic growth forecast might need to be cut after the International Monetary Fund’s likely downward revision of the global growth estimate from 3.3 per cent.
There should be more focus on public and private investment and domestic consumption should be encouraged for better economic balance as Thailand has been highly dependent on exports, he suggested. He added that any environment that could undermine the country’s business confidence should be avoided.
The government has the Bt2-trillion transport-infrastructure project and Bt350-billion water-management project to coincide with the likely global economy recovery in the next six to 10 years, he said, insisting that such projects are not unconstitutional as some have alleged.
Global slowdown
He acknowledged that the Thai economy would be affected by the global slowdown. Yingluck will invite representatives from such industries as food, electronics, electrical appliances and automobiles to discuss solutions for each.
The Ministry of Finance may give tax support to the tourism industry.
Meanwhile, the Commerce Ministry will propose to a government workshop today more Blue Flag fairs providing cheap products and more project investment as economic stimulus.
The Blue Flag fairs will help boost spending and more public investment will be made through infrastructure projects, Deputy Commerce Minister Yanyong Phuangrach said.
In a recent product-price survey at Makro’s Chaeng Wattana branch, which will be reported to the workshop led by Yingluck, most prices were found to be normal.
Based on a recent survey, in current second half Thailand’s headline inflation is expected to average 2.6-2.8 per cent on a monthly basis and 2.7 per cent on a yearly basis. The Commerce Ministry forecast that headline inflation would stay in a range of 2.8-3.4 per cent for the whole of 2013.
