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Baht/$ 34.04/08 (Bid/Ask)
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13,300
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ECONOMY
CHATRUDEE THEPARAT
The government pledged yesterday to raise consumers' purchasing power, boost export growth, ease liquidity constraints for small- to medium-sized enterprises (SME) and tourism operators and ensure foreign exchange stability for economic growth in the second half.
According to Finance Minister Surapong Suebwonglee, more pro-growth measures are being planned to cope with expected challenges in the second half. In particular, exports are likely to be affected by the US economic slowdown, agriculture prices may fall from expected oversupplies, and private investment and domestic purchasing power could shrink.
Dr Surapong, who is also a deputy prime minister, said a growing concern that needed to be addressed in the remaining months involved tight financial liquidity in the industry sector, particularly among SMEs.
''SMEs and tourism operators are now feeling the pinch from the credit crunch,'' he said after a meeting of economic ministers held yesterday.
According to Dr Surapong, the government also pledged to ensure competitiveness of the baht and make sure the currency moved in line with regional currencies.
To ensure sufficient liquidity in the money market, private commercial banks would be encouraged to extend more loans to SMEs, he said.
To boost the economy, the government is also set to quicken disbursements for megaprojects in the second half.
The meeting also approved setting up two committees to speed up disbursing the budget and strengthen closer co-operation between the public and private sectors, he said.
According to Dr Surapong, the Finance Ministry still affirmed its projection of 6% growth this year.
Economic growth for the second half has been forecast at 5.5% by a consensus of the Finance Ministry and an economic advisory team to the prime minister led by Virabongsa Ramangura. Inflation was projected at 6.5% and crude oil prices were forecast to be in the range of US$110 to $120 per barrel.
''Investments will be restored if the protest ends soon,'' he said.
Economic growth slowed more than expected in the second quarter, as soaring inflation and a slowdown in private and government investments took their toll.
The economy expanded by 5.3% in the quarter from a year earlier, after a 6.1% year-on-year gain in the first quarter, according to official figures released this week by the National Economic and Social Development Board (NESDB).
Growth slowed for the first time in more than a year as the higher export value of rice and rubber failed to offset a decline in domestic spending.
Government spending dropped 2.4% year-on-year for the period from a 0.1% decline in the first quarter, while household consumption increased only 2.4% compared to 2.6% in the previous quarter.
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