By Erich Parpart
"The measures that have been introduced, such as those to help low-income earners, support SMEs and stimulate the real estate sector, which will inject around Bt136 billion worth of capital into the system, should allow the economy to expand by more than the 2.8 per cent predicted for this year," he said after chairing the 4th Economic Stimulus and National Investment Steering Committee meeting.
"Nevertheless, external factors will have to be incorporated into the economic expansion along with the economic stimulus measures that will be more apparent by January next year, he added.
The current sum of the various stimulus budget measures introduced since August, when the Council of Economic Ministers was appointed, stands at around Bt355 billion.
Meanwhile, Veerathai Santiprabhob, the newly-appointed Bank of Thailand governor, also said the measures pose low risk to state banks, which were tasked with providing funds for the measures. He said the measures should be able to help with the economic expansion next year.
The central bank now predicts that the economy should be able to expand by 3.6-3.7 per cent next year but the International Monetary Fund (IMF) envisions a darker future for Thailand’s exports, which accounted for 65 to 70 per cent of the country’s GDP.
It believes exports will continue to be hit by the expected continuous low prices of commodities next year.
According to the Fiscal Policy Office, government spending only accounted for 15 to 20 per cent of the US$387.3 billion (as of the end of 2014) GDP.
The Asian Development Bank earlier revealed that government steps to assist rural areas hit by drought and low prices for farm products along with stimulus packages for SMEs together with planned large infrastructure projects and improved prospects for exports to major industrial economies will lift the GDP by around one percentage point from 2.7 per cent in 2015 to 3.8 per cent in 2016.
Meanwhile, Apisak provided updates on the progress of the stimulus measures.
He said low-income earners have already applied for housing loans worth up to Bt8 billion from the Government Housing Bank (GHB)’s Bt10 billion stimulus budget.
It will be up to the GHB’s board to make a decision on increasing the budget based on practicality and the bank’s risk management system.
The lowering of the transfer and mortgage fees will take effect before the end of this month and the measure to allow the owners of new houses worth less than Bt3 million to use 20 per cent of the price to reduce their personal income tax will come into effect in two weeks. But he said their effects are applicable as the Cabinet approved the measures on October 13.
Around Bt33 billion has been disbursed from the Bt60 billion that was added to the Village Fund scheme and all of it should be disbursed before the end of this year as planned.
The initiative to provide Bt5 million for each tambon, which is spearheaded by the Interior Ministry, should be ready to disburse by January, while the Small and Medium Enterprise Development Bank has already provided Bt19 billion worth of loans to SMEs under the Bt100 billion 4 per cent interest rate soft loan policy he added.