ECONOMY

Stimulus will focus on rural poor, property

WICHIT CHANTANUSORNSIRI

New state stimulus measures will focus on helping the property sector and low-income rural communities to help offset the impact of the economic downturn, according to Finance Minister Chalongphob Sussangkarn. ''Helping the grassroots economy is the first priority for the Finance Ministry. But we must wait and see the details of the measures,'' he said.

Dr Chalongphob yesterday met with his advisers to discuss various measures to jump start economic growth, projected to fall to around 4% this year compared with more than 5% in 2006.

For the property market, one proposal would be to offer temporary reductions in special business and transfer taxes to help revive consumer confidence. Other initiatives would involve accelerating budget disbursements by government agencies and state enterprises to spur investment growth, as well as prodding state-owned banks to increase lending to low-income residents.

Dr Chalongphob declined to discuss specifics, but acknowledged that property transactions had slowed considerably compared with last year.

Buyers have delayed new purchases in anticipation of declining interest rates while the slowing economy had affected household incomes, he said.

Policymakers yesterday also debated fiscal trends and laid the groundwork for a new ''early warning system'' to alert the public about changes to the government's budget and public debt profile.

They also discussed ways to implement a new public service obligation system, under which state enterprises are compensated directly from the central budget to offset costs for providing key public services such as bus and train services.

Vorapol Socatiyanurak, an adviser to the finance minister and an economist at the National Institute of Development Administration, said fiscal stimulus was needed to offset the impact of slowing consumption and investment on the economy.

He said state banks should increase their lending to small businesses while also assisting the poor to address the growing problems of high household debt.

Bangkok Post
Tuesday April 03, 2007