Special budget to fight slump

Written by Writer on Monday, October 27th, 2008

FINANCIAL CRISIS

Special budget to fight slump

The government has set aside a budget of 1.22 trillion baht to cushion the impact of the financial meltdown in the United States and Europe, Deputy Prime Minister Olarn Chaipravat said yesterday.

The fund was among a raft of measures unveiled by the deputy prime minister in the government’s first weekly address to the public on the NBT channel.

It said about 450 billion baht would be offered in the form of credit to small- and medium-sized enterprises and small-scale farmers, and another 110 billion baht to shore up the plunging Stock Exchange of Thailand.

He claimed that the economy would grow by 4% next year if the latest steps to stimulate the economic pay off.

The housing mortgage crisis in the US, which later spread to Europe, forced the Bank of Thailand to scale down growth projections to 4.3-5% for this year and 3.8-5% next year.

Mr Olarn confirmed that the injection of funds to prevent massive consumer credit defaults would not cause a budget deficit because most of the money would come from the private sector, banks and state enterprises.

The government would also shore up crop prices to help farmers when necessary, he said.

Mr Olarn was optimistic that the economic problems besetting the US and Europe would not cause a financial crisis on the scale the country faced in 1997.

However, Democrat party deputy leader Korn Chatikavanij has argued that Thailand would be hit, but to what extent no one knows, because the two continents were the main export destinations of Thai products.

The government also needed to come up with some concrete measures to prop up farm produce prices, he said.

Bangkok Post
Monday October 27, 2008