BANGKOK – The government decided today to inject an additional stimulus to revive Thailand’s sagging economy, due to the month-long political turmoil.
Teerat Rattanasevi, a government spokesman, said economy-related agencies were assigned to work out measures to stimulate the country’s economy in the remaining month of the year.
The instruction was given by Prime Minister Yingluck Shinawatra who chaired the Cabinet’s economic ministers meeting.
The premier reportedly told the meeting to strengthen confidence among domestic and international investors, boost employment in the private sector, promote essential industries and find measures to avoid a delay of the government’s Bt2 trillion investment plans.
The new measures should be announced in a month to ensure economic expansion next year while proposals from the public and private sectors will be taken into consideration in eliminating obstructions, he said.
Arkhom Termpittayapaisith, secretary general of the National Economic and Social Development Board, informed the meeting that 36 countries and economic zones have warned their people against visiting Thailand but international credit rating agencies have not lowered Thailand’s credit so far.
He said the political conflicts have affected budget disbursement in the first two months of the 2014 fiscal year (September-October) which was reported at Bt476.568 billion, 15.2 per cent lower than the corresponding period last year.
Somsak Pureesrisak, Tourism and Sports Minister, said the political demonstrations have impacted tourism in Bangkok, but not provincial destinations including Chiang Mai and Phuket.
He said the ministry has organised several tourism promotion events to boost the tourism industry.
Somchai Sujjapongse, director of the Fiscal Policy Office, said the political situation has compelled the Monetary Policy Committee (MPC) to reduce policy interest rate, consequently resulting in weakened baht compared to regional currencies excluding Indonesia.
Foreign investors have sold over Bt4.6 billion of bonds and Bt17 billion of equity instruments, he said.
Predicting continued economic risk, central bank governor Prasarn Trairatvorakul admitted that monetary policy, in additional to financial policy, was necessary to stimulate the economy to build up confidence among the private sector.
The MPC believed inflation would be at controllable level but the expansion of borrowing has slowed down from 14 per cent to 9 per cent, with a prediction growth at only 7 per cent next year.
“We have to closely monitor the US quantitative easing measures which will have an impact on currency exchange. The movement of Chinese yuan should also be closely watched as it also has an impact on the Thai currency,” he said. MCOT