Economic stimulus packages still needed to spur domestic economy – Finance Minister
Thailand’s Finance Minister Uttama Savanayana has stressed the need for the Government to introduce
economic stimulus packages periodically to spur the domestic economy and to help small suppliers
badly affected by the global economic slowdown.
He said yesterday that the Government could not just sit idly by, otherwise the economy will further
deteriorate. He maintained that the Thai economy was not as bad as some perceive it to be, adding that
the Government has been trying its best with occasional economic stimulus measures.
The finance minister admitted that the global economic slowdown is affecting the Thai economy,
especially small suppliers, who depend on exports, with several of them forced to close down.
He said that he could not forecast whether Thailand’s economic growth next year will improve or not,
adding that the Finance Ministry is closely monitoring the global economy and has taken precautionary
steps to cushion the impacts of any further slowdown.
Meanwhile, Mr. Amornthep Jawala, senior director at the research office of CIMB Bank, said that most
people who subscribed to the “Chim-Shop-Chai” scheme did not spend more than the 1,000 baht
Government giveaway because they did not have extra money or because they were reluctant to pay
more, preferring instead to save.
He said the scheme was similar to the Government’s welfare card program, which only helped provide
low-income earners with a small amount of money, but did not actually encourage them to spend more.
Since the launch of the “Chim-Shop-Chai” (Eat-Shop-Spend) program on November 9 th , about 11.72
billion baht has been spent by subscribers to the scheme, which has spurred growth by 0.1%-0.2% only.
94% of the 11.72 billion baht spent was the 1,000 baht/head giveaway and the other 6%, or 730 million
baht, was additional spending.
Both Mr. Amornthep and Mr. Kobsith Silpachai, an executive of research and capital market economy of
Kasikorn Thai Bank, suggested that, if the Government wants to spur spending, it should concentrate on
high income-earners by reducing personal income tax to encourage them to spend more.
They cited the case of the United States, where the government decided to slash corporate income tax
from 35% to 21% and to reduce personal income tax by 2.6%, which resulted in an increase, from 2.4%
to 2.9%, in GDP growth.
They urged the Government to invest more to create jobs and generate higher incomes for the people.