InfoQuest (December 12, 2019) -- Director of the Fiscal Policy Office (FPO) Mr. Lavon Saengsanit noted that Thai economic growth in the fourth quarter will be over 3 percent, making it the fastest growing quarter in 2019. Such progress should be attributed to the sustained economic stimulus measures by the government, which have delivered concrete results. Besides ever-increasing consumption, VAT revenue in October 2019 grew by 6 percent, and the growth momentum is expected to still be there in November. Those factors will boost Thai economy to realize a growth rate of 2.6-2.8 percent.
"At this point, some positive signs have shown, such as the sharp increase in domestic consumption, and a 6 percent increase in domestic value-added tax in October. The growth momentum is expected to stay in November, and we have seen some improvements in domestic consumption. The GDP in the fourth quarter will be the highest in 2019, which is estimated to grow at over 3 percent. The annual growth rate will be at 2.6-2.8 percent," said director of the FPO.
He believed that the sound momentum in the fourth quarter will add to the driving force of Thai economy in the first and second quarters of 2020, especially the "Affordable Good Houses" policy related to real estate, which is a major economic driver. If real estate can be revved up, economic turnaround in the forthcoming 1-2 quarters will be within reach.
The director of the FPO predicted that Thai economy will grow by 3.2 percent in 2020, almost the same with 2019. The main reasons include the China-US trade war, the lingering slowdown of global trade, and baht exchange rate, all worthing close attention.
He admitted that there is still much potential to be unearthed in Thai economy, which is supposed to grow at 4 percent. However, because of the unavoidable global economic circumstances, Thailand and many other countries have suffered.
He stressed that Thai economic problems are mainly caused by external factors. Facing the suffered overall economy, the countermeasure that the government can take is to support domestic economy to avoid decline. That is why the government has rolled out economic stimulus measures one after another.
"All countries should take measures to support their home economy. A case in point is Japan, which has just released an economic stimulus plan involving a huge amount of fund. We have to keep rolling out measures to support domestic economy. We have no idea how serious the external impacts in the fourth quarter are. If external economy remains to be sluggish and the slowdown remains, the government's measures can help domestic economy. Currently, our top priority is to realize a higher economic growth rate and tap into Thailand's potential as much as possible," said the director.
Besides domestic expenditure and consumption as key drivers, another factor that will contribute to Thai economic growth in the next year is investment. That includes community investment like investment in villages and communities and government investment with Thailand's urban community development fund mechanism, as well as the government's large investment, such as infrastructure investment. For various projects with signed contracts or TORs, relevant funds will enter economic system in the next year.
He believed that the "Affordable Good Houses" program will serve as another key driver, which will help sell half of the available houses in the first batch. That is to say, about 50,000 people among 100,000 qualified participants will purchase houses, channeling about 200 billion baht to real estate industry. Business sectors can use those funds to make new investments, thus boosting labor, building materials, furniture, and other industries related to real estate.
"Suppose half of those participants (50,000 people) obtain house purchasing credit, about 50,000 available houses will be sold. The current average price of the 270,000 available houses is 4 million baht. If 50,000 houses can be sold, 200 billion baht will flow to developers, who can make new investments to boost the development of real estate industry. We can see a very long supply chain of real estate industry, which involves business like labor employment, home decoration, and building material and a large number of people. If existing houses cannot be sold and the 270,000 houses are still there, developers cannot make new investments. The implementation of the program will bring greater investment," said Mr. Lavon.
He suggested private sector to use the opportunity of a stronger baht to upgrade their machines, which will help produce products with lower costs and make preparations for future competition.
Source: InfoQuest, by Kasamarporn Kittisamphan / Rachada, translated by Xinhua Silk Road
Notice: No person, organization and/or company shall disseminate or broadcast the above article on Xinhua Silk Road website without prior permission by Xinhua Silk Road.
A single purchase
