Thailand's economy can still expand 3.3 percent this year thanks to short-term stimulus measures, and extra fiscal spending should lift the growth rate to 3.6-3.7 percent next year, the finance minister said on Wednesday. Since taking power in May 2014 to end a period of prolonged political unrest, the military has struggled to revive Southeast Asia's second-largest economy, with exports and domestic demand weak. The junta has ramped up spending and implemented various stimulus measures in a bid to lift domestic activity.
This month, it introduced short-term shopping tax breaks for consumers to boost consumption and announced extra fiscal spending of 190 billion baht ($5.34 billion) in the 2017 fiscal year that began in October. "We think growth of 3.3 percent is possible this year," Apisak Tantivorawong told a seminar. "Next year, the economy is expected to perform even better," he said.
The extra spending could add 0.2-0.3 percentage point to the ministry's expected economic growth of 3.4 percent next year, Apisak said. The economy expanded 2.8 percent in 2015. Apisak said the economy will still grow below its potential of 4 percent because private investment has remained weak.
"Everyone needs to help get the economy going and higher private investment is needed" he said, adding public investment was small, accounting for only 6 percent of GDP. The government expects to spend about 220 billion baht on infrastructure projects next year, Apisak said.
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