BANGKOK: Thailand will focus on spurring domestic consumption and reopening an economy badly hit by the impact of the coronavirus crisis, the country’s new finance ministry said yesterday.
South-East Asia’s second-largest economy suffered its deepest contraction in 22 years in the second quarter as the pandemic hammered the key tourism sector and domestic activity.
The other main tasks include boosting liquidity, supporting tourism and accelerating public spending, Arkhom Termpittayapaisith told reporters on his first official day at work.
“The most urgent task is to boost liquidity for businesses affected by Covid-19 as the business sector accounts for 70% of gross domestic product (GDP), ” he said.
The government will continue to introduce measures to support domestic consumption, which makes up half of the economy, and tourism, Arkhom said.
Later, the cabinet will consider planned tax breaks to increase spending, which is estimated to add 120 billion baht (US$3.9bil) into the economy.
The ministry will speed up government spending, which accounts for 20% of GDP, including a delayed 400 billion baht budget earmarked for reviving the economy under a bigger one trillion baht borrowing plan, Arkhom said.
Regarding a persistently strong baht, Arkhom said it is “an unresolved problem” and the ministry will closely monitor.
“But the central bank will take care of it, ” he said, speaking after the baht hit a more than two-week high last week.
Longer-term measures will include reopening particularly to foreign tourists to help the economy to continue to expand next year, Arkhom said.
“Although the situation looks better next year and there may be a vaccine, it will still take one or two years for restoring the Thai economy, ” he said.
However, if domestic spending, exports and tourism improve, this will reduce government borrowing, Arkhom said.
Arkhom is the former National and Economic and Social Development Council secretary-general and is a familiar face in government. He was previously the transport minister. — Reuters