Industry group says stimulus measures boosting confidence
Measures to stimulate the economy formulated by the government’s new economic czar are already boosting business confidence, the chairman of the Federation of Thai Industries said last week, adding that additional measure set to be announced in about two weeks should result in higher investments.
Thailand’s economy has performed below expectations this year because of a combination of falling demand in many of its export markets, tepid domestic consumption based on lukewarm consumer confidence, and a failure by several successive governments to implement tough reforms to drive a restructuring of the economy. Nonetheless, may of the country’s fundamentals remain strong and provide a solid foundation for stronger future growth.
Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI) said businesses were responding positively to the government’s recent stimulus measures, and FTI members were even more upbeat after Finance Minister Apisak Tantivorawong addressed a meeting of the Federation last week.
“I have more confidence after hearing what the Finance Minister told us at the seminar because the [stimulus] measures to help low-income earners and SMEs [small and medium enterprises] that have already been introduced will soon be followed, periodically, by added measures to stimulate investment,” he said.
The Finance Minister said more measures would soon be introduced to stimulate private investment. They will, however, be relatively short term, effective only this year and next year. The government has already implemented steps to increase investment in the real estate sector, but the next set of measures will cover all types of businesses in all sectors. They will include tax relief measures and incentives that complement those of the Board of Investment.
Supant praised the government’s measures to support SMEs. “Around 90 percent of Thai businesses are SMEs that employ tens of millions of people, so if the SMEs are supported, there will be more cash flow and domestic consumption will gradually increase,” Supant said, adding that if the government could find ways to better help the agriculture sector, confidence would rise even higher.
One sector that has been performing well despite the sluggish economy has been the insurance sector. Although it garners less attention than banking, Thailand’s insurance sector has become a major force helping to drive economic growth and development, while providing a platform for financial stability and providing needed protections for business and society, a leading global financial website reported last week.
“Following various setbacks in recent years, it seems that [Thailand] is returning to its former promising route of development and stability. Once again, playing a pivotal role in the country’s growing financial strength is the insurance industry,’’ an article on the World Finance website reported.
“General insurance in Thailand has a consistent average growth that is double the rate of GDP growth,’’ the article said.
Thailand Focus Week of November 2, 2015
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