Thai fiscal and monetary policies must work in step

BANGKOK: Thailand's fiscal and monetary policies must work in step as the government tries to revive the tourism-reliant economy after a recent wave of coronavirus infections, the finance minister said on Thursday.

The government will focus on sustainable growth as stimulus measures, such as cash transfers, cannot be implemented indefinitely, Arkhom Termpittayapaisith told a business seminar.

This year the government will continue to invest in infrastructure projects as current public investment is low, at only 20% of gross domestic product (GDP) compared with 40% in the past, he said.

"What the government is doing is only short term. In the long run, we need to help business get up and running," he said.

"Monetary policy must continue to support fiscal policy," Arkhom said.

The central bank has left its benchmark interest rate at a record low of 0.50% since the middle of 2020 after cutting it by 75 basis points earlier that year to help alleviate the impact of the coronavirus pandemic.

In a bid to support Southeast Asia's second-largest economy, the government has introduced billions of dollars of stimulus, including a recent 210 billion baht ($7 billion) of cash transfers for more than 31 million people to spur consumption.

The government will also seek cabinet approval next Tuesday to offer 37.1 billion baht to about 9 million workers, a finance ministry official told reporters.

The stimulus will be financed by a planned 1 trillion baht borrowing announced last year in response to the pandemic.

Thailand had largely controlled COVID-19 by mid-2020 but a new outbreak detected in December has led to infections across the country and slowed activity.