Government's new stimulus package to cushion Thai economy in 2015

BANGKOK, August 6 (TNA) - Bangkok-based University of the Thai Chamber of Commerce’s Centre for Economic and Business Forecasting says that the government's new economic stimulus package is anticipated to help boost the national economic growth by 3.5-4 per cent in the fourth quarter of this year, and, if so, it should cushion the national economy to grow by 3 per cent year-on-year on average this year. The centre's director, Thanavath Phonvichai, told journalists on Thursday that people are following up the government's new six-measure economic stimulus package as it is hoped to help boost Thailand's gross domestic product (GDP) expansion to the projected figures. Thanavath noted that the Thai government's new economic stimulus package requires the government to inject state budgets into the national economy through new road construction, a plan by the Interior Ministry to solve drought problem by spending 6.5 billion baht and other public investment plans to be funded by the central government. Thanavath pointed out if the government could spend a state budget of 100 billion baht to fund the official projects by next month, Thailand's GDP should grow by 3.5–4 per cent in the fourth quarter and the country's GDP should expand by 3 per cent year-on-year on aveage this year. Thanavath cautioned, however, that the Thai economy appears to be entering a technical deflation, as prices of products on the domestic market have declined for six consecutive months and people's purchasing power has not increased. Thanavath stressed that the Thai economy has not yet faced a deflation, citing the Bank of Thailand (BOT)'s definition that a deflation means a condition that a country's GDP and inflation continually contract for a long certain period of time. The Thai central bank, meanwhile, resolved on August 5 to maintain its key interest rate at 1.5 per cent, reasoning that the rate was considered suitable for cushioning the national economic growth in the coming months. (TNA)