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Finance Minister says expected 2.8% growth not satisfactory

By Reuters Staff, published by Todayonline.com

THAILAND’S economy may grow 2.8% this year but is still not satisfactory, but fiscal measures will continue to support economic recovery as tourism remains weak, the country’s finance minister said today (March 3)

Southeast Asia’s second-largest economy, which is heavily reliant on tourism and exports, contracted 6.1% last year, its deepest slump in over two decades as the coronavirus pandemic cut global demand and travel.

The economy this year will grow from last year’s low base, “but that isn’t what we are happy about because the output gap is about 7%,” Arkhom Termpittayapaisith told a seminar.

Domestic activity will continue to drive the economy as the key tourist sector is far from recovering, he said.

“Demand from overseas might not return yet this year, that’s why government measures are still needed to shore up the domestic economy,” Arkhom said, adding tourism may not fully recover until 2023 or 2024.

The tourism sector slump continues due to tight travel curbs since last April, which saw foreign arrivals fall 99.8% in January year-on-year. Foreign receipts made up 11% of gross domestic product in 2019.

The country started its Covid-19 vaccination campaign on Sunday and is studying vaccine passports in a bid to boost tourism.

The government still has funds available under a 1 trillion baht ($33 billion) borrowing plan to support the recovery, Arkhom said, adding economic fundamentals remained strong and `fiscal position stable.

Arkhom said the government expects over the next two months to adjust rules on the central bank’s 500 billion baht soft loan programme for smaller firms, some of which will be used for asset warehousing to help debtors that are still unable to repay loans.

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Top: Thai finance minister Arkhom Termpittayapaisith speaks during an interview with Reuters in Bangkok on January 21, 2021. File photo: Reuters /Chalinee Thirasupa and published by Todayonline.com

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