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Government to stir economy with 100 billion baht stimulus starting in October

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Government to stir economy with 100 billion baht stimulus starting in October | The Thaiger
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The Thai Government is expected to stimulate the economy with 100 billion baht boost starting in October until the end of the year. The injection will reportedly come from both the people’s and the government’s spending under three stimulus measures according to the Deputy PM Supattanapong Punmeechaow.

The first measure will reportedly give 14 million welfare cardholders an extra 500 baht discount over the next 3 months on their shopping with the budget for this measure totalling 21 billion baht. The second measure, dubbed “Kon La Khreung” or Let’s Go Halves, will give 10 million people up to 100 baht discounts daily on beverages and household essentials with the subsidy being capped at 3,000 baht per person. The scheme will not, however, include such things as alcohol, tobacco or lottery tickets.

The third measure is aimed at wealthier Thais as tax incentives and will be offered in an effort to encourage them to spend more as consumers. The Cabinet has also approved a measure to pay 260,000 new graduates half of their salary to help the private sector. That budget is reportedly totaling 19.5 billion baht.

Supattanapong also predicts the economy will improve next year but warns it could take 2 years before the nation’s economic growth returns to the pre-Covid level. He says the country’s current budget is sufficient to boost the economy unless there is a second wave of Covid.

“But in the event that there is a second wave, the government is prepared to borrow more as its national debt is quite low compared to other countries. However the government is being cautious so it can remain financially healthy in the post-Covid era.”

SOURCE: Nation Thailand

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6 Comments

6 Comments

  1. Avatar

    Sam

    September 26, 2020 at 4:39 pm

    Hang on ! There was an announcement 2-3 months ago of 1.3 trillion baht stimulus. What happened with that ? Printing presses working overtime

    • Avatar

      lootarzoon

      September 27, 2020 at 10:21 am

      Between end March & End Dec, country will finally lose 1,4 to 1,5 Trillions as foreign tourism disapeared. Not counting the sides not accounted small revenues of undeclared shops leaving from it… 100 billion is a plaster on a wooden leg, open up the country and FAST….

  2. Avatar

    Whiro

    September 26, 2020 at 5:09 pm

    “But in the event that there is a second wave, the government is prepared to borrow more as its national debt is quite low compared to other countries. However the government is being cautious so it can remain financially healthy in the post-Covid era.”

    LMFA !! They are saying this when their citizens are so freaking UNHEALTHY financially RIGHT NOW. Instead of borrowing, why don’t they just go knock on the King’s bedroom door and ask for a donation, maybe for 1% of what he has.

  3. Avatar

    rinky stingpiece

    September 26, 2020 at 9:32 pm

    What a waste of time. Why not offer them free training in skills that are in demand?

  4. Avatar

    Crispy Fruitcake

    September 27, 2020 at 10:14 am

    The immediate need is to set up a national delivery service to get 76 million people inoculated against covid in, say, one month from the date the vaccine is released.

  5. Avatar

    Patrick Nouvel

    September 27, 2020 at 10:28 am

    Unless a second wave of Covid ? The first one remain to be seen with much less casualy than a seasonal flu … Good job by the way but non sense on the Economy side especially over the tourism mishandled sector on the immigration measures…

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Phuket

Phuket tax revenue plummets during pandemic – VIDEO

Caitlin Ashworth

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Phuket tax revenue plummets during pandemic – VIDEO | The Thaiger

The Covid-19 pandemic led has tax revenue in Phuket to be cut in half. Border closures, banning international tourists, has caused the tax revenue for the popular island destination to plummet. From January to August, total tax receipts year on year fell by more than 46%, according to data from the Phuket Area Revenue Office, obtained by The Phuket News.

In January, while the virus was still concentrated in China, Phuket’s tax revenue year on year increased by 5.38%, rising from 1.03 billion baht to 1.09 billion baht. As the coronavirus spread, by the end of the month, tax revenues fell by 5.22%, going down to 1.03 billion baht.

The numbers plunged even more when the outbreak spread over the world and Thailand closed its borders, banning international tourists. In March, when the Covid-19 outbreak was declared a pandemic by the World Health Organisation, Phuket’s tax revenues fell by 42.31%, going down from 1.13 billion baht to 797 million baht. The next month, they drastically dropped 296.86%, going down from 1.24 billion baht to 313 million baht.

Tax revenue continued to drop…

  • May – year on year decrease by 175%, dropping from 1.36 billion baht to 495 million baht.
  • June – year on year decrease by 210%, dropping from 1.72 billion baht to 555 million baht.
  • July – year on year decrease by 104%, dropping from 861 million baht to 422 million baht.

There was a year on year increase in April, going up 38.5% from 1.12 billion baht to 1.81 billion baht, but The Phuket News notes that this increase was because the deadline for filing tax returns was postponed as a relief from financial trouble brought on by the pandemic.

Tax receipts dropped year on year from January through August…

  • Personal income tax receipts fell by 40.8%.
  • Corporate income tax fell by 68.9%.
  • VAT receipts fell by 32.5%.
  • Special business tax receipts fell by 77.4%.
  • Revenue stamp receipts fell by 44.4%.
  • Tax revenues categorised as “others” fell by 72.8%.

SOURCE: Phuket News

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Economy

Bangkok office rents drop for the first time in 10 years

Caitlin Ashworth

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Bangkok office rents drop for the first time in 10 years | The Thaiger
PHOTO: Unsplash: Ragnar Vorel

As the coronavirus pandemic continues to take a toll on Thailand, and the region’s, economy, Bangkok office rents and occupancy rates are expected to drop after consistent growth over the past 10 years, according to Colliers International Thailand.

It will be the first contraction in that sector since 2010, according to the property consultancy’s associate director of research and communication, Phattarachai Taweewong. He adds that it is one of the “roughest years because of political unrest.” Since July, pro-democracy protesters have been calling on an end to the military-run government and a rewrite of the 2017 Constitution.

The ‘political unrest’ is not a new topic in Thailand and Bangkok life, but the affects of the Covid-19 lockdowns and border closures since April have put the Thai economy into recession and forcing smaller and larger businesses to reassess their businesses and trim their costs, including Bangkok’s high rents.

Bangkok office rents and occupancy rates grew around 3 – 5% each year from 2011 to 2019, but after this year’s 3 month lockdown and business restrictions, rents and occupancy rates have fallen, and are forecast to continue to fall. The new office demand following the lockdown was mostly relocations to buildings with lower rent option with landlords prepared to deal. Colliers predicts that trend will continue until at least the end of the year.

“Many tenants are struggling with the business downturn. Some returned rental spaces to landlords. Others asked for a decrease in rental rates to save on costs… Landlords cut rents slightly to help tenants. Some offered a lower rent to retain existing tenants.”

HERE’sa perspective of the situation back in May this year.

SOURCE: Bangkok Post

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Economy

Covid-19 could lead to a crisis worse than the 1997 Asian financial crisis

Caitlin Ashworth

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Covid-19 could lead to a crisis worse than the 1997 Asian financial crisis | The Thaiger
PHOTO: Chiang Rai Times

With debt relief measures set to expire this month, Thailand’s financial woes, brought on by the Covid-19 pandemic, might end up being worse that the 1997 Asian financial crisis, known in Thailand as the Tom Yam Kung crisis, according to the Bangkok Commercial Asset Management.

The 1997 Asian financial crisis started in Thailand with the financial collapse of the Thai baht after the Thai government was forced to float the baht due to lack of foreign currency to support its currency peg to the U.S. dollar.

Thailand’s booming economy came to a halt amid massive layoffs. The baht devalued swiftly and lost more than half of its value. The baht reached its lowest point of 56 units to the U.S. dollar in January 1998. The Thai stock market dropped 75%. Finance One, the largest Thai finance company until then, collapsed. – Wikapedia

A major issue is non-performing loans, or NPLs, which are loans that are more than 90 days overdue, the firm’s chairperson Bunyong Visatemongkolchai says. The NPLs make up 500 billion baht, or 3.05% of the total credit in the system, he says. Relief measures like debt reduction and debt restructuring were first put in place by the Bank of Thailand in April to aid businesses battered by the pandemic, but the programme is set to end this month and NPLs are expected to increase.

Bunyong estimates that 20% of registered debt would become NPLs, increasing the loans from 500 billion baht to 2 trillion baht, similar to the total NPL in 1997.

Since the pandemic, special mention loans have doubled, increasing from last year’s 5 billion baht to this year’s 10 billion baht, according to the Small and Medium Enterprise Development Bank of Thailand. These loans, which are more than 30 days, but less than 90 days overdue, are expected to turn into NPLs, adding up to 3 billion baht, according to the bank’s president.

A “vicious cycle” could occur if loans to small and medium sized enterprises become NPLs, a source from the Finance Ministry told the Bangkok Post in an earlier report. The management firm says financial institutions will not go bankrupt as easily as in 1997 as they have a reserve fund to deal with potential economic problems.

SOURCES: Nation Thailand | Bangkok Post

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