webfact Posted August 18, 2019 Share Posted August 18, 2019 Government stimulus package not sustainable, economist warns By Wichit Chaitrong The Nation Uttama The government stimulus package will not make much difference and might not be sustainable, an economist with Rangsit University cautioned on Sunday. The Cabinet is expected this week to approve an economic stimulus package worth Bt370 billion, covering cash handouts for farmers and low income earners, grants for children and incentives for domestic travellers as well as tax incentives to support small businesses. The government aims to boost economic growth by 3 per cent to counter both uncertain domestic conditions and the impact of trade war between the United States and China. Finance Minister Uttama Savanayana said last week that the package would prevent economic growth sliding to below 3 per cent this year. “Short-term spending as part of populist policies will not help much as the Thai economy is monopolised by big business,” said Anusorn Tamajai of Rangsit University’s Economic and Business Research Centre for Reform. Most of the spending by low income groups will end up as revenue for large businesses, he noted. He did however agree with the government plan to reduce the tax burden for small and medium-sized enterprises which could lead to more private investment. The government plans to offer generous tax reductions for those who import machinery to upgrade their production with a five-year depreciation allowance. Two state run banks; Government Savings Bank and Krung Thai Bank will also provide combined soft loans worth about Bt100 billion. Currently, total investment in GDP is 24 per cent which is considered low compared to the peak of more than 40 per cent before the crisis of 1997. The ratio of private investment to GDP is 18 per cent GDP to government investment of 6 per cent. Private consumption accounts for 51 per cent of GDP, and if boosted sustainably would drive the economy, he said. The government also plans to direct other state run banks to provide soft loans to farmers and lower income groups. The Bank for Agriculture and Agricultural Cooperatives, The Government Housing Bank, and the Small and Medium Enterprise Development Bank of Thailand are expected to join the lending under the government stimulus plan. Anusorn warned that it may not be sustainable because its effectiveness depends on public confidence in the future. Thai governments often resort to state run bank lending, quasi-fiscal measures that usually increase the burden for banks and then translate into a burden for tax players later. Source: https://www.nationthailand.com/business/30374944 -- © Copyright The Nation Thailand 2019-08-19 Follow Thaivisa on LINE for breaking Thailand news and visa info Link to comment Share on other sites More sharing options...
MaxYakov Posted August 18, 2019 Share Posted August 18, 2019 I thought that by definition stimulus packages were not to be sustained. It's the sustained (permanent) welfare payments s to half the population including illegal migrants while having half the population not paying taxes that is not sustainable. Does anyone believe this government will take heed of an economist associated with a Thai University? Link to comment Share on other sites More sharing options...
RotBenz8888 Posted August 19, 2019 Share Posted August 19, 2019 5 hours ago, webfact said: The government stimulus package will not make much difference and might not be sustainable, an economist with Rangsit University cautioned on Sunday What's not sustainable is the strength of the Baht. Link to comment Share on other sites More sharing options...
RichardColeman Posted August 19, 2019 Share Posted August 19, 2019 7 hours ago, webfact said: The government also plans to direct other state run banks to provide soft loans to farmers and lower income groups And repay them with what ? Link to comment Share on other sites More sharing options...
sammieuk1 Posted August 19, 2019 Share Posted August 19, 2019 Personal bank accounts will of corse remain unaffected and will remain stimulated to the point of arousal with 370bn up for grabs as the low earners get told sorry you had your chance but we blew it ???? Link to comment Share on other sites More sharing options...
Srikcir Posted August 19, 2019 Share Posted August 19, 2019 7 hours ago, webfact said: Finance Minister Uttama Savanayana said last week that the package would prevent economic growth sliding to below 3 per cent this year. To bad he didn't add, "or I'll resign my Ministry post." If growth does fall below 3% let's see if Prayut will hold him accountable and replace him. But I expect he won't. Link to comment Share on other sites More sharing options...
Redline Posted August 19, 2019 Share Posted August 19, 2019 33 minutes ago, RichardColeman said: And repay them with what ? It’s giveaway money-they never intend to get repaid Link to comment Share on other sites More sharing options...
Redline Posted August 19, 2019 Share Posted August 19, 2019 Never fixing core issues Link to comment Share on other sites More sharing options...
Yeahbutwhytho Posted August 19, 2019 Share Posted August 19, 2019 7 hours ago, MaxYakov said: having half the population not paying taxes that is not sustainable. Not really half, more a 1%.. Link to comment Share on other sites More sharing options...
worgeordie Posted August 19, 2019 Share Posted August 19, 2019 Not sustainable.......but very lucrative for some. ards worgeordie Link to comment Share on other sites More sharing options...
DrTuner Posted August 19, 2019 Share Posted August 19, 2019 That was a nudge nudge wink wink, be quick at the trough before it dries up. There will always be new opportunities to get your snout wet, maibpenrai. Link to comment Share on other sites More sharing options...
timendres Posted August 19, 2019 Share Posted August 19, 2019 8 hours ago, webfact said: Most of the spending by low income groups will end up as revenue for large businesses, he noted. In other words, we know who the "hand out" is really for. Nothing less than hitting the accelerator as they head into the wall. Link to comment Share on other sites More sharing options...
Fred white Posted August 19, 2019 Share Posted August 19, 2019 12 minutes ago, timendres said: In other words, we know who the "hand out" is really for. Nothing less than hitting the accelerator as they head into the wall. Most money spent goes to large corporations. If you go to your local noodle shop and buy food some of your money is used by the owner for their personal use some is spent at a market to buy more noodles the market pays it's employees and suppliers the rest is profit for the corporations and the stock holders Link to comment Share on other sites More sharing options...
marko kok prong Posted August 19, 2019 Share Posted August 19, 2019 What exactly is a soft loan? does it mean you go get your money,lie around in a hammock drinking lao khao most of the day,and possibly spray a few weeds in the morning? Link to comment Share on other sites More sharing options...
Cadbury Posted August 19, 2019 Share Posted August 19, 2019 10 hours ago, webfact said: Government stimulus package not sustainable It will be even less sustainable after it finishes paying for Thai Airways 23 new widebody jets and the 11.88 billion baht State Railway of Thailand debt to Hopewell. Link to comment Share on other sites More sharing options...
MaxYakov Posted August 19, 2019 Share Posted August 19, 2019 3 hours ago, Yeahbutwhytho said: Not really half, more a 1%.. Not a good idea to edit someone's comment in a reply (and edited down to a partial sentence at that!) without !indicating such edit has occurred. Why did you feel compelled to edit it in the first place and while supplying an unintelligible comment as well? Link to comment Share on other sites More sharing options...
wolf81 Posted August 19, 2019 Share Posted August 19, 2019 3 hours ago, timendres said: In other words, we know who the "hand out" is really for. Nothing less than hitting the accelerator as they head into the wall. Well, I am not sure what this economist thinks would be a better plan, but if there's a choice between giving money to the people or to companies, I feel giving to people is the better choice. What has happened in the Eurozone is basically giving handouts to big companies through quantitative easing. Public companies could just put stock on the stock market if they needed money and could be quite sure the ECB would buy the stock with printed money. I'd say most likely the Eurozone market is corrupted now as well, as many unhealthy companies that should have gone under, might have survived in this scheme due to easy free money. If a state gives money to the people at least that allows the people to choose to perhaps pay off some loans, buy more food or add to the savings. Each family can choose what is best in their interest. Link to comment Share on other sites More sharing options...
Isaan sailor Posted August 19, 2019 Share Posted August 19, 2019 As long as Intoxicating hot money flows at Bank of Thailand (from secret foreign buyers), the Baht will remain near six year highs. And tourism, exports, agri-Business and the SET will stagger and fall, Link to comment Share on other sites More sharing options...
DrTuner Posted August 19, 2019 Share Posted August 19, 2019 35 minutes ago, Isaan sailor said: As long as Intoxicating hot money flows at Bank of Thailand (from secret foreign buyers), the Baht will remain near six year highs. And tourism, exports, agri-Business and the SET will stagger and fall, I've been trying to pinpoint where the money is flowing into. Can't really. I'm starting to suspect there's large scale manipulation happening in the forex market. Seiing what Soros did in the 90's and how quickly it can unfold, this is starting to feel a bit scary. Link to comment Share on other sites More sharing options...
Tayaout Posted August 19, 2019 Share Posted August 19, 2019 9 hours ago, DrTuner said: I've been trying to pinpoint where the money is flowing into. Can't really. I'm starting to suspect there's large scale manipulation happening in the forex market. Seiing what Soros did in the 90's and how quickly it can unfold, this is starting to feel a bit scary. The money simply sit in bank accounts for currency speculation. This increase demand for Thai baht while not contributing to the thai economy. Link to comment Share on other sites More sharing options...
Sticky Wicket Posted August 19, 2019 Share Posted August 19, 2019 15 hours ago, Cadbury said: It will be even less sustainable after it finishes paying for Thai Airways 23 new widebody jets and the 11.88 billion baht State Railway of Thailand debt to Hopewell. They still have about 6,758 billion baht stored in foreign reserves though! That helps them keep the baht steady and manipulate it if they choose to No welfare to pay & negligible pensions, unlike our western countries who are haemorrhaging cash on those. Going to take a lot more than a few billion handouts to dent the baht's valuation Link to comment Share on other sites More sharing options...
mok199 Posted August 19, 2019 Share Posted August 19, 2019 Just the fact they feel its not suitable leads my to think otherwise... Link to comment Share on other sites More sharing options...
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