Stimulus packages may result in lower contraction in year’s last quarter
The government’s many stimulus packages should reduce the previously estimated economic contraction in the fourth quarter, said Thanavat Phonvichai, president of the University of the Thai Chamber of Commerce (UTCC).
The Centre for Economic Situation Administration on Tuesday approved a new stimulus measure granting income tax deduction of up to Bt30,000 per person to help boost their spending on goods and services.
The measure, which is awaiting Cabinet approval, will run from October 23 until December 31 and apply to the 2020 tax year. Around 4 million people are expected to be eligible for this scheme.
The government recently launched two other stimulus measures worth more than Bt60 billion to boost domestic consumption and people’s purchasing power.
Thanavat said all stimulus packages are estimated to inject Bt110 billion into the economy, which should boost growth in the fourth quarter to 2 to 3 per cent, bringing the previously estimated contraction down to between minus 4 and minus 5 per cent from minus 6 to minus 7 per cent.
Meanwhile, the consumer confidence index in September dropped to 50.2 from 51 in August, marking the first fall over the past five months, according to UTCC survey. The survey was conducted on 2,244 respondents.
This drop was due to people’s concern over political stability and the resignation of economic guru Predee Daochai from the finance ministry’s post.
New Finance Minister Arkhom Termpittayapaisith is set to take office on Monday.
The respondents were also worried about slow economic recovery and possible job losses in the future due to the Covid-19 outbreak, which has crippled the tourism sector.
Thanavat added that if the economy fails to recover in the fourth quarter, it may result in the loss of 500,000 jobs in the tourism sector.
