Kosit calls for policy continuity

ECONOMY NEW GOVERNMENT'S MISSION

Kosit calls for policy continuity

CHATRUDEE THEPARAT

The new government should take steps to accelerate fiscal spending, including new megaprojects, as well as extend support for the export sector, according to Kosit Panpiemras, the deputy prime minister. Mr Kosit, who chaired the last meeting of the government's economic steering committee yesterday, said the next government should also maintain fiscal and monetary discipline while taking measured steps to help boost growth.

Finance Minister Chalongphob Sussangkarn said external factors, including the slowdown in the US economy and increases in global oil prices, had a negative impact on the Thai economy in 2007.

He said the Finance Ministry should review new public investment plans while keeping an eye on fiscal discipline. The Bank of Thailand also should consider contingency plans in case of external volatility and economic shocks.

''The world economy and oil prices will remain significant risk factors for growth in 2008. The new government should not only take steps to boost the economy, especially the megaproject investments and support for the export sector, but also maintain discipline in monetary and fiscal policy,'' Dr Chalongphob said.

Members of the economic steering committee also called on the new government to accelerate budget disbursements to meet the 94% target for the central budget and 90% for state enterprises.

Medium-term programmes to improve competitiveness in the manufacturing and service sectors should also be continued by the new government, including skills improvement programmes and new industrial development areas.

Dr Chalongphob said the Finance Ministry's Fiscal Policy Office estimated that 2007 fourth-quarter economic growth could reach 5.5%, thanks to steady improvements in investment, exports and household spending.

This, in turn, could boost economic growth for 2007 to near 5%, he said, or at the upper range of previous government forecasts.

Santi Vilassakdanont, the chairman of the Federation of Thai Industries, said economic growth this year should improve with an increase in private investment. Risk factors included uncertainties in the direction of the US economy, oil prices and domestic consumer confidence, he said.