BANGKOK — The Treasury will present economic stimulus and New Year gift measures to Prime Minister Paetongtarn Shinawatra on November 4, hoping monetary policy will help boost the economy after fiscal policy has reached its limitations.
Pornchai Thiraveja, Director of the Fiscal Policy Office and Ministry of Finance spokesperson, announced that on November 4, Prime Minister Paetongtarn Shinawatra will meet with Ministry of Finance executives to discuss policies. The Ministry will present economic stimulus measures to the PM.
Lavaron Sangsnit, Permanent Secretary of Finance, will propose economic measures for the remaining two months of 2024 and New Year’s gift measures for 2025 to be launched in December as gifts to the public.
After discussions with the Bank of Thailand (BOT), there is mutual understanding that the Ministry of Finance will reduce its aggressive fiscal policy role due to its impact on public debt and future fiscal burden management. The BOT will need to consider how monetary policy can support economic growth and promote private sector investment, as fiscal policy space is now limited.
To support economic growth beyond 3%, monetary tools must help at appropriate levels. According to the Bank of Thailand Act Section 28/7, the Monetary Policy Committee (MPC) is responsible for setting inflation targets while considering state policies and various stability factors.
Regarding fiscal policy, the medium-term fiscal plan sets decreasing budget deficits, with the 2025 fiscal year budget set at 3.752 trillion baht, a deficit of 4.5% of GDP. Current public debt is at 65-66% of GDP. This will be reviewed after the National Economic and Social Development Council reports Q3 economic conditions in November, for cabinet consideration. For 2026, the target deficit is set at 3.5% of GDP.
“The economic effects of monetary and fiscal policies have different speeds. Fiscal policy effects are faster but temporary, while monetary policy takes about 6-8 quarters to transmit through various tools to the economic system. For example, the October interest rate reduction is expected to take about 1.5 years to fully impact the economy, with effects gradually permeating the system and reaching full potential in Q1 2026,” said the Ministry spokesperson.
Regarding Thailand’s economic situation in September 2024, tourism and exports continued to expand. However, durable goods consumption and private investment haven’t fully recovered. The situation requires continued monitoring of both domestic and international economic factors affecting economic recovery, domestic consumer purchasing power, and industrial production volume.
Private consumption indicators showed signs of slowdown from the previous month, particularly in new car and motorcycle registrations in September 2024, which decreased by 25.7% and 15.5% year-over-year, and declined 9.1% and 1.4% respectively from the previous month after seasonal adjustment.
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