Thailand plans to increase domestic spending to boost economic growth as exports fall and tourism recovers from anti-government protests that shut down Bangkok's airports last month, Finance Minister Korn Chatikavanij said, Bloomberg reported.
"We are intending to kill two birds with one stone," Korn, a former chairman of JPMorgan Chase & Co.'s Thailand unit, said in an interview with Bloomberg Television today. "On the one hand, we are helping reduce the cost of living pain for the rural poor, on the other hand boosting the domestic economy through domestic consumption as a result of putting money in their hands in the most efficient way."
Korn's Democrat party, which last held power in 2001, inherits an economy set to shrink this quarter for the first time in nine years. A global recession and an eight-day airport blockade have curbed exports and tourism, which together make up more than 80 percent of Thailand's gross domestic product.
Prime Minister Abhisit Vejjajiva, elected by parliament last week as the third premier in four months, has pledged to boost expenditure to spur growth. Korn, his University of Oxford classmate, said yesterday the government may spend a further 80 billion baht ($2.3 billion) on top of the 100 billion baht in additional funds approved by the former government last month.
"Thailand is facing wars on both sides as the global economic crisis hurts exports and political uncertainties put pressure on domestic demand," said Somprawin Manprasert, an economist at Tisco Securities Ltd. in Bangkok. "There is nothing much we can do about exports, but what we can do is boost local consumption."