Thai economy expected to grow this quarter

A shopper walks through a market in the Chinatown area of Bangkok, Thailand, on Saturday, Oct. 21, 2017. (Bloomberg/Brent Lewin)

Thailand’s economic growth could once again exceed 4 percent this quarter with a subsidy for the poor boosting consumption, a senior finance official said.

“They spent almost 100 percent” of the money, said Suwit Rojanavanich, director-general for the Finance Ministry’s fiscal policy office, referring to 10 million low-income earners who started receiving as much as 300 baht (9 dollars) a month in October.

The program is very successful and along with state spending and investment will boost growth to more than 4 percent in the last quarter of the year, he said in an interview in Bangkok on 21 November.

After years of economic malaise, Thailand is catching up with the boom in Southeast Asia as the government steps up measures to boost domestic demand including a 46 billion dollar infrastructure plan and tax breaks for year-end shopping. The end of a yearlong mourning period for King Bhumibol Adulyadej also strengthens the outlook for consumer spending.

The economy expanded 4.3 percent last quarter from a year ago, the fastest pace since 2013, supported by traditional pillars of growth like exports and tourism. The state planning agency forecast growth of 3.9 percent for calendar year 2017 and as much as 4.6 percent next year.

Fiscal Space

The government has fiscal space if needed to boost the economy as public debt and the budget deficit remain low, Suwit said. The state is increasing spending to a record in fiscal year 2018 which started in October while targeting a budget deficit of 450 billion baht, about 2.6 percent of gross domestic product. The shortfall was a record 542 billion baht in the previous fiscal year.

“We are very strict as we are the ministry that provides the budget to the country,” he said. But “if we need to, we still have several bullets on the fiscal side.” – Bloomberg

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