Deputy PM confident govt policies to boost 2012 GDP by 2.5%


BANGKOK, Aug 31 – Deputy Prime Minister and Commerce Minister Kittirat Na Ranong is confident that the government policies to be fully implemented next year, including a daily minimum wage increase, will help boost the country’s gross domestic product (GDP) by at least 2.5 per cent.  

Currently, a number of companies, both listed and other major firms, have responded to the Yingluck government’s policy to raise the daily minimum wage to Bt300.

Although small and medium enterprises (SMEs) in many industries have not yet been able to make the adjustment, the government has asked the large private companies to help the struggling SMEs to get through the transition.

Meanwhile, the government will move ahead to reduce the capital cost burden indirectly for entrepreneurs such as issuing tax-relief measures. Moreover, the government’s spending budget for 2012 is being made with spending set at Bt250 billion and it anticipates a Bt350 billion deficit budget in implementing several projects.

Mr Kittirat said the government has a clear policy to boost farm incomes, such as mortgaging rice at Bt15,000 per tonne, although many parties see the measure as pushing up rice prices in the market.

The rice mortgage scheme will be short-lived, he said. Once domestic rice prices are stable and farmers enjoy good income, the rice mortgage scheme may not be necessary.

He allowed that the government realised that the overall market must also be considered while applying such measures. If rice prices rise, trade partners may not buy Thai rice. If the rice price is volatile or drops, the government may have to cut rice cultivation and promote growing alternative energy crops such as tapioca, sugar cane.

Meanwhile, Thanawat Polwichai, Director of the University of Thai Chamber of Commerce (UTCC) Economic and Business Forecasting Center said that the government’s rice mortgage will use a budget of at least Bt1.5-4 billion. It is believed that it will cause the price of unmilled rice to rise and boost farmers’ income.

With many government economic stimulus measures on the pipeline, the centre forecast that the economy this year will grow 4.5-5.5 per cent and 5-7 per cent next year.