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Thailand: FTI, TCC petition central bank to ease monetary policy
The Federation of Thai Industries (FTI) and the Thai Chamber of Commerce, representatives of powerful industries and businesses, are scheduled to submit petitions on ThHursday to the Bank of Thailand.
They want the central bank to ease monetary measures to help the private sector and boost the economy in the second half of the year.
Kalin Sarasin, chairman of the chamber, said small and medium-sized enterprises (SMEs) are finding it tough to secure new loans amid tighter lending conditions for financial institutions imposed by the central bank, pushing many potential borrowers to loan sharks.
The Bank of Thailand also requires banks to consider only financial statements submitted to the Revenue Department when vetting SME loans.
“This is an appropriate time for the central bank to use monetary measures to boost the economy,” said Mr Kalin, who is urging the Bank of Thailand and Finance Ministry to talk to central banks of neighbouring countries to introduce local currencies when trading to reduce foreign exchange risk.
“The government should accelerate promoting border trade to help offset lower Thai exports, which have been hit hard by the simmering trade war and the baht’s appreciation,” he said.
Yesterday, the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) reported the baht appreciated 5.9% this year, the highest gain in the region.
Mr Kalin said in the first six months this year, Vietnam managed to have export growth of 7.2% from the same period last year, while other countries including Thailand, Indonesia, South Korea, Singapore, and Taiwan registered export falls.
“We should learn how Vietnam maintains export growth and competitiveness,” he said.
Mr Kalin said the chamber will meet the Commerce Ministry tomorrow to discuss topics to be discussed at the Joint Public and Private Sector Consultative Committee on Commerce on Aug 14.
Supant Mongkolsuthree, chairman of the FTI, said it is certain shipments will not be strong enough to increase economic growth this year, which is traditionally the anchor of the Thai economy.
The government needs to implement various measures to stimulate domestic consumption such as tax incentives to support personal expenditure and tourism measures to boost domestic tourism, said Mr Supant.
A cut in the personal income tax may also resuscitate domestic consumption, he said.
The stimulus measures will help keep growth momentum this year, said Mr Supant.
Predee Daochai, chairman of the Thai Bankers’ Association, said the JSCCIB agreed the government should rev up implementing stimulus measures as soon as possible to boost domestic consumption, in an effort to ease the impact from the drought and to restore private sector confidence.
JSCCIB is maintaining a forecast for economic growth of 2.9-3.3% this year, with exports expected in a range of a 1% contraction to 1% growth.
Its inflation outlook is 0.8-1.2%.
The joint committee projected economic growth in the second quarter would be lower than the 2.8% reported in the first quarter because of lower exports and slowing domestic consumption.
The economy should also see a new challenge in the second half of the year from the latest US hike of import tariffs on Chinese goods and the weakened yuan, said JSCCIB.
Source: https://www.bangkokpost.com/business/1726423/fti-tcc-petition-central-bank-to-ease-monetary-policy