21 May 2024

 In spite of the government’s efforts to stimulate economic growth by launching a series of measures, their impacts on the market may be minimal largely because consumers have not regained confidence on the economy.


The latest NIDA poll survey released on May 12 showed that 40.43 percent of respondents said the economic stimulus measures were unlikely to have any impact on the Thai economy, and another 18.26 percent believed the Thai economy will perform worse. Only 41.31 percent of the respondents thought the measures would boost the Thai economy.


Asked whether the government’s domestic spending stimulus package and e-tax scheme will make people spend more, 64.35 percent of respondents disagreed, while the other 35.65 percent said they might spend more, according to NIDA Poll. The survey was carried out from May 9-10 this year.


The outgoing government under Prime Minister Prayut Chan-o-cha has introduced a string of economic stimulus measures to boost the economy during the middle of 2019. They aim at encouraging consumers to spend in six areas, namely, shopping, reading materials, OTOP, domestic tourism, housing and e-tax.


For example, the government last week announced the latest measure to encourage consumers to buy residential property.  The cabinet agreed to cut transfer fee for housing unit worth up to Bt1 million from 2.0 percent to 0.01 percent of appraised value, and cutting mortgage registration fees from 1.0 percent to 0.01 percent of the mortgage amount. The latest scheme is aimed at encouraging low-income and middle-income earners to buy a house.


However, the measures may not boost the property market because most of the property units are priced at more than Bt1 million, according to Vit Kultanavipas, CEO of Capital One Real Estate Co., Ltd. The market of residential property unit priced lower than Bt1 million accounts for only 2-3 percent of the total market. 


The business sector also does not pin too much hope on economic stimulus measures. They view that domestic political situation and global trade scene remain the crucial factors to influence the consumers and investors’ confidence.


Supant Mongkolsuthree, Chairman of the Joint Standing Committee on Commerce, Industry and Banking, said after the meeting of the joint standing committee last week that the measures introduced by Finance Ministry could only cushion the economic growth during the transitional period. The sentiment of domestic spending including public and private investment will depend on the clarity of the new government’s policies.


The joint standing committee consisting of the Thai Chamber of Commerce, the Federation of Thai Industries and the Thai Bankers’ Association are working on a white paper as a guideline for the government’s economic stimulus in the second half of this year. The joint standing committee plans to submit the white paper to the new government in July.


The joint standing committee hopes that the new government would be formed smoothly and expects to see the new government introduce more economic stimulus policies in the second half of this year, he said.