More stimulus measures needed to tackle economic growth

The government aims to further stimulate the economy through various measures to boost the country’s economic growth in the second half of the year, and will focus on small and medium enterprises (SMEs) and vulnerable groups, deputy finance minister Paopoom Rojanasakul said on Monday.

He was speaking after the meeting on Monday of cabinet members from ministries whose work has a direct bearing on the economy in the session chaired by Prime Minister Srettha Thavisin. It was the first such meeting in this government.

The ministers of Finance, Agriculture and Cooperatives, Commerce, Energy, Industry, Transport and Culture attended the meeting, along with representatives from the National Economic and Social Development Council (NESDC), the Budget Bureau, the Board of Investment of Thailand, the  Fiscal Policy Office and the Bank of Thailand.

Paopoom said Srettha underscored the need to boost the economic expansion in the second half of the year after gross domestic product in the first quarter grew only 1.5%, the lowest rate among ASEAN members.

The PM said the low capacity utilisation rate of the industrial sector of only 57.2% needs to be addressed, as it affects employment and consumption. He urged government agencies to put in place measures to help financial institutes grant loans to SMEs to boost manufacturing and consequently other economic activities.

Paopoom said the Finance Ministry proposed having the Thai Credit Guarantee Corporation grant loans under the 11th edition of the Portfolio Guarantee Scheme (PGS) to offer loan guarantees to eligible SMEs, including first-time borrowers, under the budget of 50 billion baht. The ministry expected to present the plan to the cabinet meeting in the next few weeks, he added.

Paopoom added that Srettha tasked the Tourism and Sport Ministry with attracting tourists from the Middle East to Thailand to boost the tourism sector during the low season. The premier also ordered the Finance Ministry to design promotional campaigns to boost tourism in secondary provinces, he added.

The Finance Ministry’s permanent secretary Lavaron Sangsnit proposed issuing more economic stimulants while the government is waiting for the digital wallet scheme to be implemented. The scheme will hand out 10,000 baht in digital money to eligible Thais to spend at local businesses to boost domestic spending.

“We need more stimulus during the last quarter than the digital wallet scheme. Each ministry should come up with a scheme and present it in the next meeting,” he said.

Chalermphol Pensoot, director of the Budget Bureau, notified the meeting that the bureau’s board meeting chaired by Prime Minister had agreed to raise the fiscal budget 2024 by 122 billion baht, of which 112 billion baht will be a deficit and 10 billion baht will come from additional revenue collection.

Chalermphol said to fund economic stimulus schemes, the government will borrow 112 billion baht which will drive the ratio of public debts to GDP by 0.14% to 68% of GDP. This however is still within the limit of 70% stipulated by the State Fiscal and Financial Disciplines Act.

The move to raise the fiscal 2024 budget will be proposed to the cabinet meeting on Tuesday (May 28), he added.

Srettha said the meeting of these agencies should be held every two weeks to ensure seamless planning and implementation, while Finance Minister Pichai Chunhavajira proposed that the NESDC and Fiscal Policy Office serve as the secretary in future meetings.