The Council of Economic Ministers today will consider key elements of an urgent, comprehensive stimulus package.
Korbsak Sabhavasu, deputy premier in charge of economic affairs, told The Nation the package would cost an estimated Bt300 billion, including Bt100 billion from the supplementary state budget due for Cabinet approval shortly.
The rest of the funds will come from unused state budgets slated for fiscal 2009 and capital budgets for state enterprises.
He said the first target groups to benefit from this package would be farmers and jobless workers hit hard by the sharp economic slowdown.
First, the government will spend a not-yet-finalised amount to shore up farm prices. The previous government had earmarked Bt110 billion for this purpose, but Bt40 billion remained unused, he said.
Second, the government will retrain up to 500,000 factory workers and others who have been laid off, for 30-45 days and hire them for three months if they return to their hometowns. Afterwards, they could consider starting small businesses with loans from state-owned banks, he said.
Third, the economic-stimulus package will help exporters and tourism businesses by lowering costs.
Fourth, the real-estate sector will gain from an increased tax deduction on interest paid for home purchases, while the state-owned housing bank will provide a mortgage-insurance scheme to help lower-income groups buy new homes.
Fifth, the package will help keep the cost of living down by extending the term of selected measures initiated by the previous government.
Kobsak said the package also included Bt500 monthly allowances for senior citizens and free schooling.
Federation of Thai Industries (FTI) chairman Santi Vilassakdanont said the government should inject the first Bt100-billion budget into the grass-roots economy within three months.
Later, each ministry will also propose its own projects for stimulating the economy. For example, those of the Transport Ministry are worth a combined Bt58 billion.
Rural Roads Department director-general Wicharn Kunakulsawat said a Bt33-billion sealed-road project covering 7,200 kilometres could start immediately.
Five departments under the Labour Ministry have proposed a combined budget of Bt20 billion, but Labour Minister Phaithoon Kaeo-thong instructed them to bring the request down to Bt5 billion.
The Commerce Ministry has also sought an initial Bt2-billion budget to help exporters.
The FTI's Santi said direct investment was expected to expand less than 5 per cent this year, due to the global economic crisis that has hit the automobile and electronics industries and domestic consumption.
Several new investment projects are now suspended, while capital-intensive schemes like those in the petrochemical and auto-parts sectors face funding difficulties.
"The total value of investment this year should be lower than last year. Many of our [FTI] members express hesitation to continue their investment, while some of them have already halted their projects," he said.
On the contrary, he is optimistic some industries, such as textile, food and footwear, will help boost overall investment this year, since their orders were transferred from rivals like Vietnam and China.
The Board of Investment said new projects last year were worth Bt440 billion, down from Bt650 billion in 2007.
FTI vice chairman Tanit Sorat said the economy could expand 0.5-2.5 per cent, the same rate as forecast by the central bank, if the government could end the political turmoil, steer its economic policy to stimulate consumption and solve the liquidity shortage.
