The Thai Cabinet today approved three new stimulus packages to prop up the softening economy, said Finance Minister Uttama Savanayana.
The government expects the measures to propel full-year economic growth to 2.8% from a projection of 2.6% recently announced by the National Economic and Social Development Council (NESDC).
The Office of the National Economic and Social Development Council (NESDC) has recently announced that Thailand’s Q3 2019 GDP growth came in at 2.4 percent, adjusting the overall GDP growth this year down to 2.6 percent, citing negative factors from the trade war affecting the export sector.
The aim is to boost the economy during the remainder of this year and the first quarter of next yearFinance Minister, Mr Uttama Savanayana
1. Grassroot economy booster
The first package is to boost the grassroots economy and is divided into three sub-projects, namely a village fund for 71,742 villages graded A, B and C.
Each will receive 200,000 baht to invest in community rice barns, space to dry crops, rice mills, organic fertilizer, water sources or machinery for processing farm products.
There is also the Credit for Community Business project under which the BAAC will provide credit lines, amounting to 50 billion baht, to Village Funds and urban communities for investment in small businesses. The credit line will be for three years at an annual interest rate of 0.01%. The program will start on December 1st and end on November 30th 2023.
2. Helping farmers to reduce costs
To help farmers cover harvesting and rice quality improvement costs for the 2019-20 crop year, each household will receive 500 baht per 0.06 hectares, up to a maximum of 1.2 hectares or 10,000 baht. About 4.57 million farming households will benefit from this package, with payments to commence September 30th 2020. The Bank of Agriculture and Agricultural Cooperatives (BAAC) will make the payments, totalling 28 billion baht, and will be refunded later by the government.
3. Home buyers 50000 baht giveaway
The third package is intended to help real estate developers sell their surplus units by offering a 50,000 baht “giveaway” down payment incentive to buyers, each of whom must have a monthly income not exceeding 100,000 baht, and must be listed in the Revenue Department’s record of taxpayers.
The number of buyers will be limited to 100,000 and the 50,000 baht “giveaway” will be on a first come first serve basis. The program will start on November 27th and last until March 31st 2020.
Finance Minister Uttama said this housing stimulus package will cost the tax payer about 5 billion baht, and refunds will be wired into the accounts of the buyers through the PromptPay application by the Government Housing Bank.
Thailand’s economic growth expected to return to 2019 levels in mid-2023
Although the economy would recover next year, the recovery is still substantially below potential level resulting in a large output loss and could affect Thailand’s potential economic growth in the future with the economy expected to return to 2019 levels in mid-2023.
The Siam Commercial Bank (SCB), one of Thailand’s largest commercial banks, said in its latest economic outlook report that the country’s economy may wait until the second semester of 2023 to return to 2019 growth levels.(more…)
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