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Finance Ministry to propose short-term economic measures

UNCTAD chief urges new government to act boldly

Finance Ministry to propose short-term economic measures

With a series of economic problems knocking at the door, the Finance Ministry is preparing to submit proposed short-term measures to jumpstart the economy to the country’s new finance minister, a senior ministry official said on Thursday.
Fiscal Policy Office director-general Somchai Sajjapong said an additional budget of Bt100 billion approved by the outgoing government is expected to be disbursed in March, but that it should also be used to help laid-off workers and simultaneously create new jobs.
The additional budget was meant for the 2009 fiscal year, beginning October 1, 2008, but it should also be allocated to assist tourism and small- and medium-sized enterprises, Somchai said.
The new government, he said, should also more quickly create more liquidity in the system to persuade private commercial banks and state financial institutions to offer credit.
On a proposal to reduce personal income tax with an aim to boost the economy, Somchai said the proposal must be studied carefully because it could hurt financial discipline.
The same observation also applied to another proposal calling for a reduction of the value added tax to 4 percent from the present 7 percent because if it does not help boost consumption, the government would lose revenue of around Bt60 billion for every 1 percent in the reduction annually, he said.
And if corporate and personal income taxes were also to be reduced, the government must raise excise taxes on fuel, alcoholic drinks and tobacco in order to compensate for the lost revenue, Somchai added. (TNA)

UNCTAD chief urges new government to act boldly

Thailand’s new government should act decisively to restore confidence in the country’s trade and investment sectors, United Nations Conference on Trade and Development (UNCTAD) secretary-general Supachai Panitchpakdi asserted.

UNCTAD Secretary-General Supachai Panitchpakdi.

He said the Thai economy remains sound, despite the fact that lesser numbers of foreign tourists are traveling to Thailand due to the recent political disturbances.
However, more Thai people are now traveling locally, he said, adding that Thailand’s investment outlook remains promising.
Dr. Supachai declined to respond to news reports that the Democrat Party would invite him to become an economic advisor, saying he did not want to comment nor criticize the expected new cabinet lineup.
He projected that the global economy would contract next year, resulting in the economies of developed countries contracting by 0.50-0.90 percent.
However, the UNCTAD chief said he believed the overall Asian economy would still grow at a satisfactory level though it would be affected by the global economic slowdown because most financial institutions in Asia remain strong with high liquidity.
Dr. Supachai projected the Asian economy would continue to grow 4-5 percent on average in the coming year. (TNA)

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