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Time to consider exit from stimulus package: PM

By THE NATION

Published on February 5, 2010

BANGKOK: -- Prime Minister Abhisit Vejjajiva yesterday said one of the government's top challenges was to come up with an effective exit strategy now that the economy has recovered.

He told a seminar hosted by senior budget officials from the Organisation of Economic Cooperation and Development (OECD) that the 2008-09 US and global economic crises had prompted several countries to provide massive stimulus packages to prevent a free fall of their economies.

In Thailand, the initial stimulus measures amounted to more than Bt100 billion in the first half of last year, followed by the Thai Khemkhaeng package worth Bt1.43 trillion and covering fiscal 2009-11.

"In the first stage, we introduced more measures for free education, covering the first 12 years of schooling while handing out a Bt2,000 cash voucher to 9 million low-income earners among other measures," the premier said.

"This helped the Thai economy recover gradually after contracting 7.1 per cent in the first quarter of 2009. In the second and third quarters, gross domestic product (GDP) steadily improved - minus 4.9 and minus 2.8 per cent, respectively [before returning to positive growth in the fourth quarter].

"This year, our GDP forecast is 3.5-4-per-cent growth," he said, adding that it was time for Thailand and other countries to consider exit strategies for the rest of the stimulus measures.

Experts have emphasised the timing of the exit strategies must be right. If measures are withdrawn prematurely, the present recovery could stall. On the other hand, there is a risk of hyperinflation if measures are withdrawn too late.

Besides exit strategies on stimulus packages, Abhisit said other challenges included measures to deal with an ageing society in Thailand and other countries.

-- The Nation 2010-02-05

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