Thailand’s economy is expected to return to normal levels within two years as the government tries to mitigate the global impact of the coronavirus pandemic, Deputy Prime Minister Supattanapong Punmeechaow said on Friday.
Southeast Asia’s second-largest economy is set to contract by a record 8.5% this year as the outbreak ravaged the key tourism industry and slowed consumption, the Finance Ministry predicts.
The government has used nearly 800 billion baht in supporting the economy, Mr Supattanapong told a seminar organised by the Prachachat business media.
“I think the economy should get back to normal levels within two years,” he said. “But if we can manage it very well, we may see that late next year”.
The government will continue to introduce stimulus measures and plans subsidies under a “co-pay” scheme, rather than handouts, to help spur consumption, he said, without giving further details.
In a bid to cope with the impact of the outbreak, the government has introduced a 1.9 trillion baht response package, including a 1 trillion baht borrowing plan.
The borrowing will lift the public debt to GDP ratio to 57% from about 47% in July, still within a 60% cap, Danucha Pichayanan, the deputy secretary-general of the National Economic and Social Development Council, told the seminar.
“The higher debt burden will reduce policy space… but the current debt level can still be managed and there is room for driving the economy,” he said.
Thailand has had a deficit budget for the past 10 years and must try to have a balanced budget at least over the next five-six years, Mr Danucha said.