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Thailand’s Economic Projections for 2009 and 2010

The Fiscal Policy Office (FPO) at the Ministry of Finance has recently announced its forecast that the Thai economy for 2009 will contract at -3.0 percent, as a result of the global economic crisis that adversely affected the export volume of goods and services.

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The Fiscal Policy Office (FPO) at the Ministry of Finance has recently announced its forecast that the Thai economy for 2009 will contract at -3.0 percent, as a result of the global economic crisis that adversely affected the export volume of goods and services.

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Despite the sharp contraction during the first half of the year, the FPO has projected that the economy would start to recover in the second half of 2009, and show positive growth in the last quarter of the year. Major contributing factors to Thailand’s economic recovery are expanding public expenditures, especially from investment expenditures under the “Strong Thailand 2012” program, along with the revival of major trading partners’ economies, particularly the Asian economies. Nonetheless, the Thai economy still faces some risks from the slow recovery of private expenditures in both consumption and investment. The sharp contraction in private spending, particularly during the frst half of the year, would cause average private consumption in 2009 to shrink at the rate of -1.0 percent.

Inflation is projected to contract by -0.8 percent per year, following declining oil prices compared to last year, as well as the appreciating trend of the Thai Baht. The unemployment rate is projected to be 1.8 percent of the total labor force, as the employment situation improves following overall economic recovery in the second half of the year. The current account in 2009 is projected to record a large surplus of 8.0 percent of GDP, due mainly to the expected trade surplus of US$20.5 billion.

The Thai economy for 2010 is forecast to expand at 3.3 percent per year (or within the range of 2.5 - 4.1 percent per year).

The Thai economy for 2010 is forecast to expand at 3.3 percent per year (or within the range of 2.5 - 4.1 percent per year).

The Thai economy for 2010 is forecast to expand at 3.3 percent per year (or within the range of 2.5 – 4.1 percent per year), given continued expansionary fiscal policy from late 2009, particularly from public expenditure under the “Strong Thailand 2012” program, as well as the revival of private expenditures from the low base set in 2009. In this connection, public consumption growth in 2009 is projected to accelerate to 6.4 percent per year, while public investment growth is projected to increase to 5.3 percent per year. As for internal economic stability, inflation is projected to rise to 2.5 percent per year (or within the range of 2.0 – 3.0 percent per year), following the increasing oil price compared to 2009. The current account in 2010 is projected to record a smaller surplus of 4.0 percent of GDP (or within the range of 3.7 – 4.6 percent of GDP), as the revival in domestic demand would lead to faster expansion of import value than export value.

Public investment is forecast to accelerate to 8.2 percent per year (or within the range of 5.2 – 11.3 percent per year), while public consumption in 2010 is projected to expand at the rate of 4.8 percent per year (or within the range of 4.0 – 5.7 percent per year.) In addition, recovery of private expenditures from the low base in 2009 would support Thailand’s economic expansion. In this connection, private consumption is forecasted to grow at 4.2 percent per year (or within the range of – 4.7 percent per year), as household incomes increase following the economic revival with employment conditions and work hours returning to normal level. Private investment in 2010 is projected to grow at 6.6 percent per year (or within the range of 2.7 – 9.0 percent per year), partly due to the public investment under the “Strong Thailand 2012” program that would lead to a crowding-in effect for private investment. Meanwhile, export of goods and services in 2010 is forecasted to grow at 5.6 percent per year (or within the range of 4.8 – 6.7 percent per year), as the economies of major trading partners recover as well as improve from the low base last year. The growth of import volume of goods and services is projected to accelerate to 12.4 percent per year (or within the range of 10.6 – 14.2 percent per year), as a result of the recovery of domestic spending and export recovery.

Headline inflation in 2010 is projected to increase to 2.5 percent per year (or within the range of 2.0 – 3.0 percent per year) as global oil and agricultural prices are expected to rise in line with the recovery of the global economy. The unemployment rate is expected to further decline to its normal level at 1.3 percent of the total labor force (or within the range of 1.0 – 1.5 percent of the total labor force). As for external stability, the current account is projected to decline from the previous year, but still record a surplus of 4.0 percent of GDP (or within the range of 3.7 – 4.6 percent of GDP).

Head Office, Office of the Board of Investment
555 Vibhavadi-Rangsit Road, Chatuchak Bangkok 10900, Thailand.
Tel: +66 (0) 2537 8111, +66 (0) 2537 8555
Fax: +66 (0) 2537 8177
Website: www.boi.go.th
E-mail: [email protected]

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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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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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