Government stimulus a blessing to Thailand’s GDP growth

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BANGKOK, Dec 27 – Thailand’s gross domestic product (GDP) this year is adjusted upward slightly from 5.5 per cent to 5.7 per cent mainly due to the government stimulus actions in various projects, according to the Finance Ministry.

Somchai Sujjapongse, director general of the Fiscal Policy Office, said domestic consumption is its highest in eight years given the government policy on the Bt300 daily minimum wage, a salary increase for civil servants, the rice pledging scheme, tax exemption for first time car buyers and first time homeowners, and the gradual reduction of corporate income taxes.

He said Thailand’s growing export volume in the last three months will contribute to an export expansion to 4.5 per cent from an earlier estimation of 3.9 per cent.

Consumption in the private sector rose by 5.6 per cent from the original prediction of 3-4 per cent while private investment has increased from 14.1 per cent to 16.1 per cent.

It was earlier estimated that foreign tourists to Thailand this year would be 21.7 million people but the latest report showed 22 million visitors and that the inflation rate will be 3 per cent – a decline from last year in accord with the global trend of cheaper oil prices and commodities, Mr Somchai said.

The unemployment rate is 0.6 per cent and public debt 43.9 per cent – lower than the fiscal consolidation of 60 per cent.

He projected next year’s economic growth at 5 per cent thanks to the reduction of corporate income tax to 20 per cent and personal income tax and the government’s massive investment .