Finance says financial aid packages as New Year gifts will bolster spendings

The Ministry of Finance is hopeful that the financial packages that the government will roll out as New Year gifts for the low income people will help to increase purchasing power and bolster spendings.

But the Bank of Thailand warns that economic stimulus packages should only be applied in the short term.

The ministry’s Fiscal and Monetary Policy Office Deputy Director General Dr. Pornchai Thiraveja revealed yesterday that it will be meeting with the Bank for Agriculture and Agricultural Cooperatives, the Government Savings Bank and Krungthai Bank to ensure that financial aid payments are made to low income earners in accordance with the cabinet’s resolution.

These include 5.4 million low income earners, excluding poor people in the agriculture sector, who will receive 1,500 � 3,000 baht/ person and 2.9 million poor farmers.

Details will hopefully be finalized in the meeting and aid payments should begin to be made by early next month.

It is hoped that these financial aids will help to drive domestic purchasing power for the latter part of the year which will in turn contribute to a 3.3% growth in GDP.

One indicator that the national economy is still in good health however is the favorable spending by the private sector in the remaining months of the year which has grown significantly when compared to the same period last year.

Other helpful factors are the increase in budget disbursements for regular expenditure as well as investments in state funded projects which will contribute to driving the national economy, the ministry said.

But Mr Wirathai Santipraphob, the governor of the Bank of Thailand, said that the government’s financial aid packages for the poor and the national New Year shopping campaign will only improve domestic spending in the short term and will no doubt contribute in no small degree to bolstering the economy for the coming year.

He however warned that these measures must be applied only for the short term as prolonged application of say 6 months to a year will result in a premature spending of future financial assets which could result in a significant rise in domestic debt.

In any event, the Bank of Thailand was still confident that the national economy will grow by at least 3.2% this year and minimum expectations for 2017 is that the economy will grow by the same figure.

Source: Thai Public Broadcasting Service (Thai PBS)

Post Author: thailandmirror.com