Chatrudee Theparat and Penchan Charoensuthipan
The government on Wednesday decided to increase the 2009 budget deficit by 100 billion baht to spur the economy and guard against mass layoffs in light of global economic recession and fears of mass job losses.
Deputy Prime Minister Olarn Chaipravat, in charge of economic affairs, said it is the duty of government to try to maintain economic growth and the additional deficit is one such measure.
"If Thailand's gross domestic product (GDP) retreats 1 per cent, then it is projected that about 400,000 people will become jobless," he said.
If the government does nothing, the number of jobless was expected to hit 600,000 to one million next year, and economic growth would fall to 3 per cent.
The government's economic measures, including the extra deficit, would lift economic growth to 4 per cent, he said.
Finance Minister Suchart ThadaThamrongvech said the Thai economy is expected to slow next year following the effects of the global economic crisis. Thai exports, domestic consumption and private investment would all drop. As a result, the country would need more state investment to maintain the economy and prevent mass layoffs in the private sector.
The deficit money will be injected into sectors that can help the poor and create more jobs, including the village fund and small- and medium-sized lending (SML) programme.
The additional deficit would raise Thailand's 2009 budget deficit to 349.5 billion baht, or 3.5 per cent of GDP, from 2.4 per cent previously.
Prime Minister Somchai Wongsawat said the government will speed up three major projects to lift the grassroots economy.
He said at a workshop which discussed ways to help the rural poor that his government would press ahead with three projects — the Village Fund, One Tambon One Product (Otop) and SML programme.
The projects were first launched by the government of Thaksin Shinawatra.
According to Mr Somchai, the government will register the Village Fund like a corporate firm and will also increase the amount of money allocated to each village to 1.5 or two million baht from the present one million.
The government expects to allot a budget for the SML project of 15 billion baht and 800-900 million baht for Otop development in fiscal year 2009.
Narong Phetprasert, an economist at Chulalongkorn University, predicted that unemployment would be worse than Mr Olarn's projection.
He said unemployment could surge to more than three million from March next year.
Mr Narong said the labour market faces a tough time between March and May 2009. The economy will then face the full impact of the global downturn.
About 30 per cent of industrial manufacturers in the country make products according to orders placed by companies abroad, Mr Narong said.
When those overseas companies cut expenses due to sagging demand for their products, they are likely to reduce orders. As a result, factories in Thailand will have to lay off workers, he said.
He estimated a million workers will be laid off during those three months.
The period is also the dry season in Thailand and farmers will finish harvesting their crops by then. Farm workers will have then no work.
Mr Narong suggested that businesses and the government bank on domestic markets for survival instead of relying on foreign consumption.
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The government on Wednesday decided to increase the 2009 budget deficit by 100 billion baht to spur the economy and guard against mass layoffs in light of global economic recession and fears of mass job losses.
Deputy Prime Minister Olarn Chaipravat, in charge of economic affairs, said it is the duty of government to try to maintain economic growth and the additional deficit is one such measure.
"If Thailand's gross domestic product (GDP) retreats 1 per cent, then it is projected that about 400,000 people will become jobless," he said.
If the government does nothing, the number of jobless was expected to hit 600,000 to one million next year, and economic growth would fall to 3 per cent.
The government's economic measures, including the extra deficit, would lift economic growth to 4 per cent, he said.
Finance Minister Suchart ThadaThamrongvech said the Thai economy is expected to slow next year following the effects of the global economic crisis. Thai exports, domestic consumption and private investment would all drop. As a result, the country would need more state investment to maintain the economy and prevent mass layoffs in the private sector.
The deficit money will be injected into sectors that can help the poor and create more jobs, including the village fund and small- and medium-sized lending (SML) programme.
The additional deficit would raise Thailand's 2009 budget deficit to 349.5 billion baht, or 3.5 per cent of GDP, from 2.4 per cent previously.
Prime Minister Somchai Wongsawat said the government will speed up three major projects to lift the grassroots economy.
He said at a workshop which discussed ways to help the rural poor that his government would press ahead with three projects — the Village Fund, One Tambon One Product (Otop) and SML programme.
The projects were first launched by the government of Thaksin Shinawatra.
According to Mr Somchai, the government will register the Village Fund like a corporate firm and will also increase the amount of money allocated to each village to 1.5 or two million baht from the present one million.
The government expects to allot a budget for the SML project of 15 billion baht and 800-900 million baht for Otop development in fiscal year 2009.
Narong Phetprasert, an economist at Chulalongkorn University, predicted that unemployment would be worse than Mr Olarn's projection.
He said unemployment could surge to more than three million from March next year.
Mr Narong said the labour market faces a tough time between March and May 2009. The economy will then face the full impact of the global downturn.
About 30 per cent of industrial manufacturers in the country make products according to orders placed by companies abroad, Mr Narong said.
When those overseas companies cut expenses due to sagging demand for their products, they are likely to reduce orders. As a result, factories in Thailand will have to lay off workers, he said.
He estimated a million workers will be laid off during those three months.
The period is also the dry season in Thailand and farmers will finish harvesting their crops by then. Farm workers will have then no work.
Mr Narong suggested that businesses and the government bank on domestic markets for survival instead of relying on foreign consumption.
Discuss
Add this link to...
Tell a friend
Bury
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