Thailand aims for 5% annual growth as higher spending set for 2025

BANGKOK (Reuters): Thailand will target annual economic growth of 5% on average over the next four years, planning higher spending and looking to boost tourism as it strives to emerge as a regional hub for travel, Prime Minister Srettha Thavisin said on Friday.

Real estate mogul and political newcomer Srettha said his government aimed to grow the daily minimum wage over that period, rising to more than 400 baht ($11.4) this year and 600 baht in 2027, from 330 baht to 370 baht now.

Srettha, who is also finance minister, told a seminar on budget preparations for fiscal year 2025 that the government was committed to boosting tourism, a key source of jobs, by permanently waiving visas for Chinese tourists from March.

"Our target is still clear, that the Thai economy must grow at an average of 5% in the four-year period," he added.

That represents a sharp increase from last year's estimate of a sluggish 2.4% in Southeast Asia's second-largest economy, and short of its 2022 figure.

Thailand attracted close to 40 million visitors in 2019, before the COVID-19 pandemic disrupted travel.

The populist government's growth plans centre largely on economic stimulus and luring long-term investment.

The 2025 budget would have a key role in supporting the government's policies, Srettha added.

The government plans spending of 3.6 trillion baht, with a budget deficit of 713 billion for fiscal 2025, which starts on Oct. 1, Budget Bureau head Chalermphol Pensoot told the seminar.

The spending and deficit figures are in line with a medium-term plan, but stand 3.4% and 2.9% higher, respectively, than in 2024.

The 2025 budget heads to cabinet for its approval in March and May before parliamentary and royal endorsement, Chalermphol added.

Srettha is forging ahead with a controversial digital wallet handout programme, in a 500 billion baht plan that envisages transfers of 10,000 baht to 50 million people this year to spend within six months, to boost growth.

This week, he also urged the central bank to cut interest rates, saying high borrowing costs were hurting the economy, smaller businesses and low-income earners. ($1=35.04 baht)

(Reporting by Orathai Sriring, Kitiphong Thaichareon, Satawasin Staporncharnchai and Panarat Thepgumpanat; Writing by Martin Petty; Editing by Kanupriya Kapoor and Clarence Fernandez). - Reuters

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