Thai economy may contract less this year than forecast - ministry

The shrinkage could be less than the central bank's latest projection for a 7.8% contraction,

  
A view of the Chao Phraya river amid the spread of the coronavirus disease (COVID-19) in Bangkok, Thailand, June 21, 2020.

A view of the Chao Phraya river amid the spread of the coronavirus disease (COVID-19) in Bangkok, Thailand, June 21, 2020.

REUTERS/Athit Perawongmetha

BANGKOK - Thailand's economy is likely to shrink less this year than the record 8.5% projected previously, helped by stimulus measures, the finance ministry said on Tuesday, as the government tries to revive a coronavirus-hit economy.

The shrinkage could be less than the central bank's latest projection for a 7.8% contraction, Lavaron Sangsnit, head of the finance ministry's fiscal policy office, told a briefing. 

On Tuesday, cabinet approved measures expected to inject 81 billion baht ($2.56 billion) into the economy in the final quarter of this year, he said.

The government will from October offer cash handouts worth 21 billion baht for low income earners, and provide a total 30 billion baht of subsidies to 10 million consumers in small amounts over the course of about three months.

"The stimulus will help boost consumption in the final quarter of this year and lift GDP by 0.25%," Lavaron said.

The measures are part of government efforts to ease the impact of the global pandemic on Southeast Asia's second-largest economy, which suffered its biggest contraction in 22 years in the second quarter as the outbreak ravaged tourism and consumption.

Cabinet also approved an operating budget of 1.51 trillion baht and an investment budget of 291 billion baht for 44 state enterprises in the 2021 fiscal year starting Oct. 1 ($1 = 31.64 baht)

(Reporting by Kitphong Thaichareon, Satawasin Staporncharnchai and Panarat Thepgumpanat; Writing by Orathai Sriring; Editing by Martin Petty) ((orathai.sriring@tr.com; +662 0802309;))

More From Global