Pichai reiterates government’s commitment to achieve 3% GDP growth

His commitment came after the World Bank's latest Thailand Economic Monitor lowered the country's gross domestic product growth forecast from 2.8% to 2.4%, citing various Thai economic agencies and think-tanks.  

He explained that the World Bank's decision could be based on the government's lack of tools, budget, or projects to boost the economy. However, those tools and packages would be implemented properly later, he said. 

Citing that the previous GDP projection included the digital wallet scheme, which increased the growth number, he said the World Bank had not included the impact of the scheme in its current forecast as it was still being approved. As a result, the growth figure has been lowered.

He emphasised that the government was still targeting 3% economic growth this year, and vowed that all relevant agencies would work tirelessly to achieve it. 

Regarding the recent proposal package to stimulate Thailand's stock market, which the ministry unveiled on Tuesday and drew an indifferent response from investors, Pichai said that he felt no pressure.

The package, he said, was an attempt by the ministry to do something and prevent the market’s slump. It would at least help prevent further fall in stock value.

Last week, the Stock Exchange of Thailand (SET) Index experienced volatility as a result of massive net sell-offs by foreign investors for 27 consecutive days, since May 21. The trend continues this week. The SET Index fell below the psychological support level of 1,300 points on Monday, owing to domestic political uncertainties and the implementation of the uptick rule, which requires stock regulators to increase their supervision of short-selling transactions.

To keep the market from tumbling, the Finance Ministry announced a new state fund that will inject at least 100 billion baht into it. 

The ministry planned to complete the proposal to establish the new fund within two weeks, similar to the Vayupak Fund, a previous state-controlled investment fund that focused on Thai stocks with strong fundamentals. 

He cited higher returns on investments in foreign assets than in Thailand, such as bond yields, as another reason for the decline of the SET Index.

Meanwhile, he indicated that central banks around the world were about to start lowering interest rates. As a result, during this time, investors have prioritised investing in high-yield markets. 

"It's very common for investors to move funds around to find the best place for investing their money. It goes back and forth, and when we figure out the timing, the capital will flow back in on its own," Pichai said. 

He discussed the progress of the Environment Social Governance ("Thai ESG") fund, a Thai mutual fund for sustainability, after the ministry recently adjusted some conditions and which will be submitted to the Cabinet for approval very soon. 

The conditions for the new Thai ESG Fund, which the government announced recently, have been updated as follows: 

1. Modify the tax deduction conditions by increasing the credit limit to a maximum of 30% of annual taxable income and raising the maximum purchase amount from 100,000 to 300,000 baht. The shift came after a study found that investing $10 billion in long-term equity funds would push up the SET Index by 25-27 points. The investment will become a savings option for young people, self-employed individuals, and those who invest in retirement funds such as Retirement Mutual Fund (RMF).

2. Reduce the holding period from 8 years to 5 years, mandatory from the date of purchase in order to attract young generation, self-employed people who can take the risk of investing in securities but they still need higher liquidity.

3. Expanding investment policies by encouraging the disclosure of information on sustainable actions of listed companies in a more comprehensive dimension. Aside from focusing only on outstanding environmental businesses, good governance and transparent promotion will be equitably prioritised, providing more value-based information for decision-making.