Spending spree measure to help boost Thai economy

BANGKOK, December 28 (TNA) - The Fiscal Policy Office (FPO), under the Ministry of Finance, says that the government's economic stimulus measures, including a seven-day tax incentive for New Year shoppers, should help boost Thailand's economic growth rate closer to 3 per cent this year. Kulaya Tantitemit, Executive Director of FPO's Macroeconomic Policy Bureau, made the prediction on December 28, after FPO earlier projected that Thailand gross domestic product (GDP) should grow by 2.8 per cent on average this year. Regarding the Thai government’s recent measure on allowing people to deduct up to 15,000 baht spent on some products and services during December 25-31, 2015 from their taxable income, Kulaya pointed out that about 3 million people are eligible for the seven-day measure and half of them are expected to exercise the incentive. Kulaya assesed if each of the eligible people spent 15,000 baht, 22.5 billion baht would be injected into the Thai economy, the country's GDP would rise by 0.1 per cent and private consumption would increase by 0.4 per cent. The senior official projected that Thailand's GDP should expand by 3.8 per cent next year, boosted by positive factors, namely more government spending on infrastructure projects, like railways, highways and airports, booming domestic tourism and growing border trade with Myanmar, Laos and Cambodia. The senior official, however, warned of such risk factors as an economic slowdown in China and Japan, a possible fluctuation in global finance and exchange rates, low prices of farm products, falling oil prices and drought. Meanwhile, Somkiat Triratpan, Director of the Ministry of Commerce’s Trade Policy and Strategy Office, foresaw that Thai exports should grow by 5 per cent next year, with goods expected to enjoy higher growth in 2016 including electronics, cars and parts, ornamental and jewellery and spa, as well as education and tourism-related businesses. Somkiat cautioned, however, if global oil prices continued to further decline, it could affect Thai exports of manufactured goods next year. According to the senior official, Thai exports should shrink by 5.5 per cent this year, equivalent to about 215 billion US dollars, instead of 3 per cent as earlier projected, caused by, among other factors, declining world oil prices. The senior official acknowledged that falling world oil prices have affected as much as 10 per cent of Thailand’s total export this year and the negative impact should continue until the first quarter of 2016 due to continual global economic slowdown. (TNA)