The Finance Ministry and the Bank of Thailand have been told to study new measures to stimulate economy for the rest of the year, with investment and consumption expected to slow down in the second half, says the government's planning unit.
The recommendations made yesterday seem to run counter to remarks by Deputy Prime Minister Kittiratt Na-Ranong on Thursday that the government would not launch any short-term stimulus measures this year despite the global economic slowdown.
"We have no measures to inject money to stimulate the economy in the short run," Mr Kittiratt said.
"The planned borrowing will come as a boon to the economy in the long term. We don't want to boost the economy in the same way it was done in the past, when the government spent a lot but it was not an investment."
Arkhom Termpittayapaisith, secretary-general of the National Economic and Social Development Board (NESDB), reported to a workshop chaired by Prime Minister Yingluck Shinawatra that Thailand faces a spate of challenges in the second half, especially with the US central bank's plan to wind down its quantitative easing, China's liquidity crunch and the delayed recovery of the EU.
Sluggish domestic consumption and halting budget disbursements were also cited as obstacles to be addressed.
The NESDB report said household consumption in April and May rose by 0.8% compared with 3.9% in the first quarter.
Private investment in April and May fell by 2.1% against 11.1% growth in the first quarter, while average industrial utilisation for the two months was 63% compared with 67.1%.
The only sector that remained promising was tourism, which grew by 19.4% with 3.9 million visitors.
In May, the government's planning agency cut its economic growth projection to a range of 4.2% to 5.2% this year from 4.5% to 5.5%, as exports will likely dip.
Global economic uncertainty remains high, and the baht is still volatile. Domestic consumption is expected to lag in the absence of the first-time car buyer scheme, the report said.
Deputy Prime Minister and Commerce Minister Niwatthamrong Bunsongphaisan said the government has set next week to consider appropriate stimulus measures to boost the economy in the second half.
Separately, the NESDB and related agencies were told at yesterday's workshop to study the costs of feed meal (maize, soybean and fish meal) and fertiliser in a bid to help farmers.
The NESDB said all goods prices were found to have risen between 3.8% and 25.8% since last September.
Government spokesman Teerat Ratanasevi said commerce and agriculture officials will be required to study the goods pricing structure, logistics costs and agricultural zoning.
About the author
- Writer: Chatrudee Theparat
Position: Business Reporter