Thai cabinet has approved a stimulus package worth an estimated $12.7 billion to help alleviate the impact from the coronavirus. Thailand’s tourism industry, exports and imports have been hard his due to the coronavirus.
Thailand is heavily reliant on global demand but its exports have been hurt by global trade tensions. Furthermore Thai tourism, which was a bright spot, is being hit hard by the coronavirus.
Fifty-three coronavirus cases have been confirmed in Thailand and one Thai person has died.
The package includes soft loans, a fund, and tax benefits for those affected by the outbreak. But there were no cash handouts for low-income earners as previously announced.
The package is expected to inject about 400 billion baht ($12.74 billion) into the economy to get it get going, Lavaron Sangsnit, a senior finance ministry official, told reporters.
“We are ready to introduce more if necessary,” he said.
The stimulus includes 150 billion Thai baht of soft loans at 2% interest rates. Also another 30 billion baht of lending from the security fund at a rate of 3%, Finance Minister Uttama Savanayana told Reuters after a cabinet meeting.
Thai business tax reduced
The Thai government will offer relaxed debt repayments and lower interest rates for businesses. While the central bank has also asked banks to help debtors, he said.
Withholding taxes for businesses will be reduced to 1.5% from 3.0%, and they will be offered 1.5-times tax deductions on interest rates, and 3-times tax deductions on wage expenses, Uttama said.
There will be support for utilities costs, and higher tax benefits from some long-term fund investments. Above all to boost the SET stock market.
The government will set up a 20 billion baht fund to help firms or workers affected by the coronavirus. Furthermore it will exempt import duties on materials for making face masks, Uttama said.
“We think this will help but not sufficient to counter the rising negative COVID-19 impacts,” said Charnon Boonnuch, economist at Nomura in Singapore.
Thailand’s economy grew 2.4% last year, the weakest pace in five years. Growth this year is likely to be much lower, with Kasikornbank’s research center predicting it at just 0.5%, the lowest since 2009.