BANGKOK: Thailand’s economic fundamentals remain strong and the government has no plans to cut its value-added tax (VAT) to boost activity hit by the coronavirus outbreak, the finance minister said on Thursday.
Thailand is heavily reliant on global demand but its exports have been hurt by global trade tensions, and more recently its key tourism sector has been knocked by the pandemic.
On Tuesday, the cabinet approved a stimulus package set to inject 400 bil baht (RM53.96 bil) into the economy as authorities stepped up efforts to fight the broadening fallout of the coronavirus.
Deputy Prime Minister Somkid Jatusripitak said the government is preparing additional stimulus to help consumers as well as a fund to support the stock market, which is tumbling on global recession fears and on the rising number of worldwide infections.
However, the government has no immediate plans to lower taxes to support investment in the stock market, but will wait to see if any measures are needed, Uttama Savanayana told reporters.
“I understand that investors are concerned about the virus and maybe too concerned sometimes despite the market’s solid fundamentals,” he said.
“The market has been through several situations and the index had managed to come back,” he said of the benchmark index which triggered a circuit breaker after diving 10% on Thursday to its lowest since June 2012.
Earlier in the day Thailand reported 11 new cases of coronavirus, the single biggest jump.
The Stock Exchange of Thailand (SET) on Thursday announced fee reductions, which is about 500 mil baht a year, for listed firms, securities, asset management firms and custodians to weather the disruptions.
Businesses are also urging the government to cut the VAT, currently at 7%, to help boost domestic spending as the outbreak has left shopping malls, resorts and beaches deserted.
Consumer confidence in February hit its lowest level in nearly 21 years, according to the survey by the University of the Thai Chamber of Commerce, which on Thursday cut its forecast for economic growth this year to 0.6%-1.6% from 2.8%, with a contraction in the first quarter. – March 12, 2020, Reuters
