Bangkok: Thailand plans 43.5 billion baht (S$1.9 billion) of additional stimulus to boost domestic consumption and an increase in benefits for local travel, officials said on Wednesday, as the government tries to revive a flagging, pandemic-hit economy.
Some 22.5 billion baht will be offered to 5 million new consumers, or 3,500 baht each, under the current co-payment scheme. The 10 million consumers who had already signed up would get a further 500 baht, finance ministry official Pornchai Theeravet told a briefing, report agencies.The new package would be given in small amounts from January to March, while 1,500 baht would be offered to some 14 million low-income earners, he said, as “New Year gifts”.
Tourism Authority of Thailand governor Yuthasak Supasorn said the government would increase benefits in an earlier programme to boost domestic tourism in the absence of foreign visitors, and offer a new subsidy aimed at encouraging travel for seniors. The stimulus, agreed by the government’s coronavirus economic task force on Wednesday, will still need Cabinet approval.
It will be financed by the government’s planned 1 trillion baht borrowing aimed at mitigating the impact of the pandemic on an economy the government predicts will contract by 6 per cent this year, as tourism is far away from recovering.
Thailand may not see foreign tourists numbers return to a pre-pandemic level of 40 million arrivals until 2024, Finance Minister Arkhom Termpittayapaisith said earlier on Wednesday. He added that Thailand’s tourism-dependent economy should receive 8 million foreign visitors next year and see a recovery to a pre-coronavirus pandemic level of 40 million visitors by 2024.
South-east Asia’s second-largest economy contracted 6.4 per cent in the third quarter from a year earlier after slumping 12.1 per cent in the prior quarter, with tourism taking a hit.
The economy is expected to take two years to recover but the tourist sector should take until 2024, Mr Arkhom told a business seminar.“If global travel gets better than expected after there is a vaccine, our tourism may come back faster,” he added.
While Thailand has had few outbreaks and removed most restrictions, it has not lifted a travel ban imposed in April.
It recently started receiving a limited number of tourists on special visas with a quarantine requirement.
Officials have forecast 6.7 million tourists this year, 6.69 million of which visited in the first quarter before the ban.
The spending of the nearly 40 million foreign tourists last year accounted for at least 11 per cent of gross domestic product.
He added that monetary policy must also be in step with fiscal policy to support the recovery.
“Monetary policy has to remain accommodative until the economy fully recovers,” he said, adding the central bank would deal with the strengthening of the baht.