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Thailand’s PM speeds up stimulus measures to boost domestic spending

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Thailand’s PM speeds up stimulus measures to boost domestic spending | Thaiger

Thailand’s PM is speeding up economic stimulus measures to continue the effort to boost domestic spending throughout the year. In a meeting yesterday, PM Prayut Chan-o-cha told the Finance Ministry to push forward the rollout of the 3rd phase’ co-payment scheme, financial relief scheme and the Section 33 We Love Each Other programme.

Deputy PM Supattanapong Punmeechaow, noted that the co-payment scheme needs to be rolled out by June of this year to keep domestic tourism afloat. He cited a report that found such stimulus measures were helping the economy.

In the co-payment scheme, the government pays 50% of food, drinks and general goods purchases of up to 150 baht per person per day, capped at 3,500 baht per person for a specified duration. The first phase covered 10 million people, each receiving a 3,000 baht money transfer. The second phase, which ends on March 31, is paying an additional 5 million people 3,500 baht each.

The We Win financial relief scheme gave 32.4 million people, who were experiencing economic hardships caused by the Covid pandemic, a handout of 7,000 baht for 2 months. But those people must prove they only have a taxable income of no more than 300,000 baht per year or a monthly income not exceeding 25,000 baht. Those who wish to collect the handout must also have not more than 500,000 baht in total in bank deposit accounts. Kulaya Tantitemit, the FPO’s director-general, says low-income earners and small-scale retail shops have greatly benefitted from the scheme.

“There are more than 14.79 million eligible recipients and 1.5 million outlets participating in the scheme.”

She says the state subsidy was worth around 48.2 billion baht and 50.6 billion was out of pocket. Bangkok, Samut Prakan, Chiang Mai, Songkhla and Chon Buri were the 5 provinces that saw the highest spending. And, Kulaya is urging those who received the subsidies to use them up before the second phase’ end date of March 31.

SOURCE: Bangkok Post

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4 Comments

4 Comments

  1. Avatar

    toby andrews

    Tuesday, March 23, 2021 at 10:50 pm

    crumbs from the tyrants; table

  2. Avatar

    Bill

    Wednesday, March 24, 2021 at 3:13 am

    10 baht per person, maybe they it will cover the songthaew

  3. Avatar

    Ian Bromley

    Wednesday, March 24, 2021 at 6:59 am

    These schemes are like throwing sweets to children. Considering the rapid increase in personal debt in the last year this money will not be used gor expenditure but to pay off loan sharks and banks. The onky thing that will get thr economy back ibto better shape is to rapidly vaccinate the total population, open the borders to tourists and introduce economic stimuli that create full time employment. But all that is too much like applied intelligence and hard work.

  4. Avatar

    Bobby B

    Wednesday, March 24, 2021 at 10:35 am

    Please explain how this will “boost domestic spending”.

    It’s just moving money around, there is no new money (tourists or expats money) added, and that’s what Thailand needs.

    This will boost nothing but the PM’s ego.

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Ann Carter is an award-winning journalist from the United States with over 12 years experience in print and broadcast news. Her work has been featured in America, China and Thailand as she has worked internationally at major news stations as a writer and producer. Carter graduated from the Walter Williams Missouri School of Journalism in the USA.

Economy

China grows 18.3%, the only major economy to grow in 2020

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China grows 18.3%, the only major economy to grow in 2020 | Thaiger
PHOTO: China - the second largest economy, and only major economy to grow last year.

China’s economy set a record for growth in Q1, 2021, marking an 18.3% jump in year-on-year figures, the biggest quarterly growth in almost 30 years. China only started publishing growth statistics in 1992, and this drastic increase is the fastest growth recorded since then.

The figures, however impressive, are mainly due to what is called a “low base effect” where the change from a low starting point translates into big percentage statistics. Because of the devastating economic effects of the Covid-19 pandemic, the Q1 2020 figures were dismal, allowing the big gain over the last year.

Quarter to quarter, the last 3 months saw only a 0.6% growth, but in the last quarter of 2020 China recorded an economic boom of 6.5% according to the Chinese government. Still, the figures are admirable, as China was the only major economy in the world to achieve growth in 2020. Most of the planet struggled to contain global Covid-19 outbreaks, crippling economies across the globe. But China, now the second-largest economy in the world, managed a 2.3% overall expansion. Even Chinese officials called the impressive statistics “better than we had expected.”

China has been growing in terms of imports and exports as well, with exports expanding nearly 31% and imports up 38% by price over last years.

SOURCE: CNN

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Economy

Thai household debt expected to keep rising- Kasikorn Research

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Thai household debt expected to keep rising- Kasikorn Research | Thaiger

Despite rolling out Covid-19 vaccines, in which could see a faster return to pre-Covid times, Thailand’s household debt is expected to keep rising. Kasikorn Research analysts say it could, in fact, reach 89-91% by the end of the year.

In a recent survey, KResearch says 10.8% of respondents could be stuck in a financial crisis. Of those who may be stuck, they indicated a drop in income, an inability to reduce expenses, and a high debt service burden per month that is exceeding 50% of their monthly incomes. This group of survey respondents is also concerned that it may not be able to provide for its basic needs in the near future.

In the 3rd quarter of 2020 and the year end, the figures were lower, at 86.6%, and 89.2% respectively. The upward trend isn’t unique as loans have increased while the economy has slowed. Almost 20% of household debts now are receiving financial-aid measures from financial institutions. The Bank of Thailand says the end of 2020 say 2.79 trillion baht tied up in financial relief programmes, which is equivalent to the 20%.

Despite government handouts and stimulus measures, the third wave of the pandemic is expected to increase outstanding debt under financial-aid programmes through the end of this month, but analysts say they are likely to not be any higher than the 3rd quarter of 2020. The amount of borrowers who may need further assistance after the relief programmes end in June 2021, is expected to be high.

The Covid vaccination rollout may give more flexibility in ending lockdowns in Thailand, funneling future financial assistance to those who are in serious need. The rollout may signal a switch from the standardized measures that were previously in place for determining who qualifies for financial aid, to a more individualised debt handling policy by financial institutions.

When asked what types of assistance are needed, survey participants ranked liquidity support at the top, followed by job creation that could help them maintain a stable revenue stream. Extension of financial-aid measures ranked 3rd. The rankings, indeed, point towards respondents needing to stabilize their platform of revenue first, before needing financial help.

SOURCE: Thai Enquirer

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Economy

2 emergency decrees provide businesses financial help

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2 emergency decrees provide businesses financial help | Thaiger
PHOTO: 2 Decrees aim for financial relief for struggling businesses

Thailand enacted 2 new emergency decrees today aimed at providing assistance to businesses and reducing default interest rates to help people affected by Covid-19. A deputy government spokeswoman confirmed the needed action was critical to protect and aid entrepreneurs and small and medium-sized enterprises during the time of pandemic-driven economic crisis.

The goal was to combat unfair interest rates on debt many are suffering, and to provide loans to help keep businesses afloat as the end of the Coronavirus is nowhere in sight.

The Emergency Decree on the Provision of Financial Assistance for Entrepreneurs Affected By the Covid-19 Pandemic allocates 250 billion baht in loans for businesses to recover from the devastating economic effects of the global pandemic. 100 billion baht of this is specifically set aside for those businesses in debt to participate in asset warehousing or debt repurchasing plans.

Asset warehousing allows businesses, like hotels, to essentially store their property in the care of a creditor for a fee until the economy recovers enough to take over the property again and start making money with it again. Debt repurchasing is a process for a business to buy back its own debt with better terms or a lower rate with the purchase price considered a payment to the principal debt not the interest, similar to refinancing a home.

The second of the emergency decrees, an amendment to the Civil and Commercial Code, looks to close loopholes caused by ambiguity in the law that allowed predatory creditors to charge unreasonable interest rates.

If someone missed a loan payment, the original law did not set a default rate, so lenders could charge additional interest. Debtors can now base default rate calculations on the unpaid principal in the updated law. The new decree sets a 3% yearly interest rate and lowers the default rate to 5% a year from the originally 7.5%. The Finance Ministry declared interest rates would be revised every 3 years.

SOURCE: Bangkok Post

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