Thai FM to propose law amendment, inject more money to boost economy

[webfact]

Finance Ministry to propose law amendment, inject more money to boost economy

BANGKOK, 31 March 2015 (NNT) – The Finance Ministry will propose law amendment and inject more money in to the local system to boost economy.

Finance Minister Sommai Phasee said that the ministry will propose to the Prime Minister’s Office a plan to amend the law governing the administration of the national village and urban community fund.

Mr. Sommai said that the PM’s Office will be asked to add another 40 billion baht to the village fund after 200 billion baht has already been poured into it, with an aim to help boost the economy and consumption of the grassroots.

He stated that both proposals are considered a kind of government investments when the economic condition remains sluggish.

However, the Finance Minister insisted that the government will not be introducing any direct stimulus measures as the country’s household debt level is very high .

While assuring that the government will speed up the budget disbursement to help the economy grow, Mr. Sommai said that a growth rate of 2%-3% will be acceptable for Thailand when the global economic slowdown still continues.


-- NNT 2015-03-31

[Prbkk]

Fiscal policy is very unclear. On the one hand we read about high level of household debt and the fact that consumer spending will not be part of economic recovery but now this which seems to imply the opposite.

[webfact]

Sommai advises government to stimulate investment, not domestic spending



BANGKOK: -- The Ministry of Finance has urged the government to stimulate economy through investment not domestic spending, pointing to the highest level of the current household debts.

Sommai Phasee, the finance minister, admitted yesterday that the country’s economic growth projections will stand between 2 – 3% and the highest number that can be expected will not exceed 4%.

Previous growth numbers of between 5 – 6% cannot be realistically expected as a consequence of the global economic downturn.

Mr Sommai however warns that the government should not promote increased domestic spending as household debt has risen to worrying levels and currently stands at 80% of GDP.

The minister stated that Thailand’s economic growth figures for the month of February already showed significant signs of slowing down and this has prompted the Ministry of Finance to make adjustments to new GDP figures this April. Indications are that GDP figures will be lower than 3.9%.

“GDP growth figures will remain at 4% for some time and accordingly adjustments will be made to new GDP projections this April,” he said.

Meanwhile Prime Minister Gen Prayut Chan-o-cha reaffirmed that government budget allocations has been approved but disbursement will have to go through proper channels and procedures in accordance with guidelines set out by the law.

The prime minister expects that by the second and third quarter, the funds will begin to trickle down into the economic sector which will result in significant contributions to the country as a whole.

At an academic seminar under the topic ‘Thailand… the Latest Patient in Asia’, most agreed that for the past 10 years the country’s economy has only grown by 30% while Indonesia and the Philippines economies grew by 60%.

Vietnam has also experienced tremendous expansion recording 70% economic growth overall.

They agreed that the recent use of populist policies in the country has not been able to address to the problems facing the country and instead had detrimentally affected the general health and significantly weakened the economy.

This has resulted in foreign investments being drawn elsewhere, to Vietnam for example which has managed to overhaul Thailand’s economy.

They said further compounding the problem is the ever increasing average age of the population which is pushing the country towards a more aged society.

The academics are advocating the employment of temporary one year tax relaxation measures which will create incentives for investors.

This will ensure immediate investment by private investors in critical sectors like energy, automotive and construction.

Source: http://englishnews.thaipbs.or.th/sommai-advises-government-to-stimulate-investment-not-domestic-spending


-- Thai PBS 2015-03-31

[dcutman]

They agreed that the recent use of populist policies in the country has not been able to address to the problems facing the country and instead had detrimentally affected the general health and significantly weakened the economy.

Recent? Does this mean since the coup or in the last 5 to 10 years?

[Strangebrew]

Now they want 40 billion to feed the village people grassroots? and I quote: Mr. Sommai said that the PM’s Office will be asked to add another 40 billion baht to the village fund after 200 billion baht has already been poured into it, with an aim to help boost the economy and consumption of the grassroots." Reading is believeing Guess Sommai is related Somchai maybe from same Sombitch.

[Eric Loh]

Wise to continue with a successful Thaksin idea; the Village Fund.

[Srikcir]

How the mighty have fallen.

In the beginning we had -

"A GDP expansion of 4 per cent in 2015 is definitely achievable ..." , Deputy Prime Minister in charge of the economy Pridiya Devakula, The Nation 2015-01-15

Then recently we had -

"Deputy Prime Minister M.R. Pridiyathorn Devakula told CNBC news during his participation in the 2015 Asian Investment Summit that Thailand’s economic growth this year would likely be around 3%" - Bangkok Bank’s Kosit expects this year’s economic growth at 3-4%, 2015-03-27.

Now we have -

"Mr. Sommai said that a growth rate of 2%-3% will be acceptable for Thailand when the global economic slowdown still continues."

Sommai said on 2015-02-02 that the negative inflation rate would not lead to a deflation. Looks like the Junta will be put to the test very shortly.

[Whyamiandwhatamidoinghere]

Maybe this is a "grassroot" movement and later a bowel movement. Nothing like fiber to get this sluggish turd economy moving out.

[NongKhaiKid]

Fiscal policy is very unclear. On the one hand we read about high level of household debt and the fact that consumer spending will not be part of economic recovery but now this which seems to imply the opposite.

I'm waiting for the estimates of what will be spent on domestic tourism etc over the Songkran holidays while ignoring the fact that the ' tourism ' is in fact people travelling home to be with their families.

[jerojero]

And how exactly do these billions get distributed? Give cash to every individual household, and how much skimmed by the layers of bureaucracy, officials and influential elites? Bet majority of baht goes I to limited number of bank accounts.