Business leaders have urged the new government to roll out tax-oriented stimulus measures to boost the country's sluggish economy amid myriad headwinds.
An economic stimulus package with a focus on tax measures for spending and the property sector should be put in place to nudge domestic consumption this year, Predee Daochai, chairman of the Thai Bankers' Association (TBA), said after Wednesday's monthly meeting of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB).
The 2020 budget bill is not expected to be ready by the start of the fiscal year on Oct 1 because of the lengthy time taken to form a new government, so stimulus measures are urgently needed, he said.
"Tax measures to encourage domestic spending are needed to support the economy amid external uncertainties, particularly the US-China trade spat," Mr Predee said. "Such measures proved useful in the past."
The Fiscal Policy Office (FPO) is reportedly calling on each bureau to propose tentative stimulus measures to prepare for the new government as economic momentum cools.
The Finance Ministry expects a three- to four-month delay in budget expenditure after the start of the fiscal year because of the new government's installation.
The degree of the stimulus depends on the economic circumstances when the measures are rolled out, but stimulus measures that nudge recipients to spend more than they receive from the government are preferred, said Lavaron Sangsnit, director-general of the FPO.
A source at the Finance Ministry who requested anonymity said recently that 77 billion baht remained for the next government to spend in fiscal 2019, which ends Sept 30.
The global economic slowdown, largely crippled by the US-China trade brawl, has already delivered a severe blow to the Thai economy, as seen by a 1.9% contraction in exports for the first four months of the year. The economy grew at its slowest pace in more than four years in the first quarter at 2.8%.
The new coalition government with a wafer-thin majority is another threat to the Thai economy.
With both internal and external uncertainties, the JSCCIB is looking to revise down its export growth forecast for this year from 3-5% now, which is already far below the 6.7% growth of 2018.
It also plans to cut the 2019 GDP growth projection, with the revision to be announced next month, Mr Predee said.
"The economic growth rate is mainly pressured by exports, while domestic demand is still positive," he said. "So we would like to wait for actual data."
In April, the JSCCIB cut its economic projection because the political situation after the general election remained unstable. It lowered its 2019 GDP view from 4-4.3% growth to 3.7-4%.
Others are jumping on the bandwagon to downgrade the country's economic outlook for the year.
The National Economic and Social Development Council lowered its full-year GDP growth forecast to 3.3-3.8% from 3.5-4.5%, while the Bank of Thailand eyes a further cut after it downgraded economic growth to 3.8% in March from 4% predicted in December.
The JSCCIB also requires the Joint Public-Private Sector Consultative Committee to meet every six months and a working committee on Ease of Doing Business to meet quarterly.
The moves are aimed at building up collaboration between the government and the private sector and monitoring the economic environment in a bid to handle unexpected situations.
Mr Predee said the new government should continue pushing megaprojects to strengthen the country's economic fundamentals in the long run.
