Thailand: Ministry preps extra funds for Q4

The Finance Ministry will pump additional money into the economic system in the fourth quarter to further improve the flagging economy amid the prolonged Covid-19 pandemic, said director-general of the Fiscal Policy Office (FPO), Kulaya Tantitemit.

Ms Kulaya said the fresh money to be injected in the fourth quarter might be higher than that previously planned for the last quarter.

The fresh money will mainly come from three sources: the 500 billion baht borrowing under the existing second emergency loan decree, the 2022 fiscal budget, and the state enterprises’ investment budget.

Of the total 500 billion baht borrowing, at least 400 billion baht is expected to be pumped into the economic system in the fourth quarter this year and the first quarter next year.

Ms Kulaya added if the country achieves the targets of reopening and vaccination, the FPO expects the number of foreign tourist arrivals this year to reach 300,000, higher than a common forecast among research houses of 150,000.

She said the FPO has seen a positive sign in the number of tourist arrivals, which reached 18,000 in July, the highest over 16 months. It has expected the number to reach 200,000 in the fourth quarter.

She said the economy in the second half of the year could expand less than the first half because of the pandemic’s impact, which has dented domestic consumption and local investment.

The FPO earlier forecast economic growth of 1.3% this year. The office will revisit the economic forecast again in October.

She added that the current easing of the lockdown might benefit economic growth in the second half of this year.

Earlier, SCB Economic Intelligence Center (SCB EIC), the research house of Siam Commercial Bank (SCB), forecast Thailand’s economy would return to the 2019 level in the middle of 2023, a delay from the beginning of 2023 as previously projected.

The delayed recovery is mainly due to the continuing infections.

Under this scenario, SCB EIC has slashed its GDP growth projection for 2021 from 0.9% previously to 0.7%.

For 2022, the research house expects the economy to grow 3.4% from a recovery in both domestic and external demand following higher vaccination rates.

The research house has downgraded its foreign tourist arrivals forecast this year from 300,000 to 170,000. However, it expects tourist arrivals to rise to 6.3 million in 2022, thanks to the improving outbreak situation locally and internationally, as well as a low base effect.