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Government spending and Private Consumption to spur Thai economy

With a 3.8% increase in private consumption in the second quarter this year and higher tourism growth, the Thai economy seems to be on the way of a modest economic recovery.

Olivier Languepin

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With a 3.8% increase in private consumption in the second quarter this year and higher tourism growth, the Thai economy seems to be on the way of a modest economic recovery.

Deputy finance minister Wisudhi Srisuphan yesterday voiced optimism that government spending in infrastructure projects will help bolster economy with continual growth is expected in the second half of the year.

Besides, government’s spending on infrastructure mega projects would stimulate growth in the second half of this year.

GDP growth this year is now projected to rise to 3.3%, exceeding the earlier forecast 3%, the University of the Thai Chamber of Commerce (UTCC) revealed last week.

The improved growth was attributed mainly to government spending in mega projects and the charter referendum which ended peacefully with the majority giving approval to the charter.

Thanawat Pholvichai, director of the UTCC’s Center for Economic and Business Forecasting, said the recent sign of economic recovery was seen in the consumers confidence index in July which rose for the first time in seven months, along with lower inflation rate, improving drought situation helped boost the growth.

BOT: High consumption growth in Q2 reflects economic recovery

The Bank of Thailand (BOT) has indicated that the Thai economy has fully recovered, judging from the significant increases in GDP and private consumption in the second quarter.

Mr Jaturong Jantarangs, the BOT’s Assistant Governor for the Monetary Policy Group, noted that national GDP expanded 3.5 percent year-on-year during the second quarter. Moreover, according to a report by the National Economic and Social Development Board, private consumption also posted a rise of 3.8 percent.

He said both figures are indicative of full economic recovery although public investment, which has been a major driver of the economy, is slowing down slightly while private investment remains sluggish.

Compared with domestic factors, the Assistant Governor pointed out that the central bank is indeed giving more weight to the mounting risks from uncertainties in the global economy.

As for the appreciation of the Thai baht over the past 2-3 days, Mr Jaturong said it was due to the positive economic indicators of the second quarter as well as the success of the August 7 constitutional referendum, lending a boost to capital inflow.

Economics

The Future of Asia: greener but with a public and private debt hangover

The COVID-19 pandemic has been a perfect storm, destroying jobs, worsening poverty and inequality, and creating a public and private debt problem—especially for countries and firms already in fragile financial health beforehand

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The Sydney Opera resumed live performances and the city of Melbourne recently hosted the Australian Open tennis tournament with fans (mostly) in attendance.

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50:50 campaign may not get immediate extension

National News Bureau of Thailand

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BANGKOK (NNT) – The government’s 50:50 co-pay campaign expiring on 31st March may not be getting an immediate campaign extension. The Minister of Finance says campaign evaluation is needed to improve future campaigns.

The Minister of Finance Arkhom Termpittayapaisith today announced the government may not be able to reach a conclusion on the extension of the 50:50 co-pay campaign in time for the current 31st March campaign end date, as evaluations are needed to better improve the campaign.

Originally introduced last year, the 50:50 campaign is a financial aid campaign for people impacted by the COVID-19 pandemic, in which the government subsidizes up to half the price of purchases at participating stores, with a daily cap on the subsidy amount of 150 baht, and a 3,500 baht per person subsidy limit over the entire campaign.

The campaign has already been extended once, with the current end date set for 31st March.

The Finance Minister said that payout campaigns for the general public are still valid in this period, allowing time for the 50:50 campaign to be assessed, and to address reports of fraud at some participating stores.

The Fiscal Police Office Director General and the Ministry of Finance Spokesperson Kulaya Tantitemit, said today that a bigger quota could be offered in Phase 3 of the 50:50 campaign beyond the 15 million people enrolled in the first two phases, while existing participants will need to confirm their identity if they want to participate in Phase 3, without the need to fill out the registration form.

Mrs Kulaya said the campaign will still be funded by emergency loan credit allocated for pandemic compensation, which still has about 200 billion baht available as of today.

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Economics

Customs Department Considers Measures to Help SMEs

National News Bureau of Thailand

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BANGKOK (NNT) – The Customs Department is seeking ways to reduce the impact of the exemption on import tax and value-added tax (VAT) for imported goods worth up to 1,500 baht, as such measures are hurting small and medium-sized enterprises (SMEs).

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