Bid to spur economy in wake of GDP figure for Q1

The Cabinet yesterday approved a number of measures related to private consumption, private investment, state expenditure and exports in order to promote stable economic expansion.

The move came after the country’s gross domestic product grew less than expected year on year at 5.3 per cent in the first quarter, with some economic indicators signalling a slowdown.

Finance Minister Kittiratt Na Ranong said more economic-stimulus measures will be introduced to increase the country's GDP by 1 per cent or about Bt120 billion in value. The Finance Ministry itself has been ordered by the Cabinet to give advises to related ministries as well as the Office of the National Economic and Social Development Board in te consideration of extra measures. He said the new measures will benefit the country's economy in the long term or from the first quarter of 2014.

The Bank of Thailand last month revised downward its estimate for full-year 2013 growth to 4.2 per cent from 5.1 per cent, and its export-growth estimate to 4 per cent from 7.5 per cent, citing cooling global and local demand.

Credit Suisse Group, meanwhile, yesterday cut its forecast for Thai economic expansion this year to 4 per cent from 4.7 per cent, citing delays in infrastructure spending and weaker-than-expected export growth, according to Bloomberg.

In an attempt to boost private consumption through government measures, consumers will be able to purchase cheaper energy-saving electrical appliances via state-sponsored exhibitions, while companies will be allowed to deduct tax at two times for domestic seminar expenses for the 2013 and 2014 tax years.

Private investment

As a means of simultaneously upgrading the tourism industry and stimulating the economy through private investment, tourism operators will be permitted to deduct depreciation on assets or equipment purchased in 2013 and 2014 at the accelerated rate of 50 per cent of the asset price in the first year, and the remainder in the following five years.

More carmakers will be allowed to benefit from Board of Investment promotional privileges to join the eco-car programme, which currently has five participants, while the agricultural-processing industry will see relaxed regulations for plant establishment. Small-and medium-sized enterprises and individuals, meanwhile, will be able to gain easier credit access through phase 5 of Thai Credit Guarantee Corp’s (TCG) portfolio guarantee scheme, the Small and Medium Enterprise Bank of Thailand’s productivity improvement loans, TCG’s micro-finance and nano-finance.

To help prop up the economy, disbursement of the government’s expenditure budget will be accelerated in the provinces, local administrative organisations and via off-budget funds for the 2013 fiscal year.

Amid slowing demand overseas, exporters will be encouraged to focus more on markets with good potential, such as other ASEAN countries, and particularly Cambodia, Laos, Myanmar and Vietnam (CLMV), and China’s smaller provinces.

To promote border trade, relaxation of baht holdings during entry to and exit from Thailand will also be promoted for trade settlement with neighbouring countries.

The Export-Import Bank of Thailand will also play a more proactive role to mitigate risk and support liquidity for those trading, servicing and investing overseas, especially in CLMV countries.

In the tourism sector, Thailand will be promoted as a shopping paradise to attract foreign visitors, while multiple-entry tourist visas will be made available this year.

By Thitari Likitthanatham,
Nakarin Srilert
The Nation

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