Thailand plans to tackle growth slowdown

BANGKOK • The political gridlock in Thailand is prompting the junta to evaluate measures to shore up the country’s slowing growth.

Finance Minister Apisak Tantivorawong last Friday said the ministry is considering steps to inject 20 billion baht (RM2.6 billion) of stimulus into South-East Asia’s second-largest economy.

Growth may slow to the low 3% range in the first quarter (1Q) and 2Q, he told reporters in Bangkok.

“We want the measures to be effective during the 2Q and 3Q in order to make sure the economy won’t be slumping when the new government comes in,” he said.

The steps being mulled include tax breaks to spur tourism and assistance for people on low incomes, he said.

Pro-military and anti-junta parties are tussling to form a government after a disputed and inconclusive general election in March, following almost five years of military rule.

The central bank warned the economy could be affected if the process of forming the next administration drags on to August or later.

Such a delay could affect the implementation of the national budget, public sector projects and private sector investment decisions, Bank of Thailand governor Veerathai Santiprabhob said at a seminar in Bangkok last Friday.

The central bank’s forecast of 3.8% GDP growth in 2019 — close to the country’s potential of about 4% — assumes a government is in place by June, Veerathai said. It’s too early to discount the possibility of an interest- rate hike, he said.

But some analysts are sceptical about the monetary authority’s scope to add to its December increase in borrowing costs, the first since 2011, because of political risk and a challenging export outlook in the trade-dependent economy.

Exports likely fell about 4% in March from a year earlier, according to a Bloomberg survey ahead of the official report today. That would be the fourth decline in five months. — Bloomberg