Thailand Launches $1.2 Billion Stimulus Package

Small-and medium-sized enterprises can use loans to buy machinery and upgrade their operations.

Thailand on May 2 launched a 44 billion baht (US$1.2 billion) loan package aimed at boosting the country's flagging economy. The loans, to be issued starting this month, are aimed at bolstering support for low-income earners, said Finance Minister Chalongphob Sussangkarn. "The government will help strengthen the grassroots economy which would indirectly benefit the country's economic growth overall."

Combined with general loan goals for the year, the four state-run banks plan to approve 466 billion baht (US$13.3 billion) in credit to consumers this year, Chalongphob said. Low- and middle-income people will qualify for the new loans for homes, business development, community projects and education.

Small- and medium-sized enterprises can also apply for loans to buy machinery and upgrade their operations, Chalongphop said.

Thailand's economy has been hit by sagging investor confidence as the military-backed government, which came to power in a September coup, executed a host of policy blunders, including controversial currency control rules. The Bank of Thailand last week revised down its economic growth forecast for 2007 to 3.8%-4.8%, from its previous target of 4%-5% due to sluggish consumption and weak business sentiment. Pannee Sathavarodom, director-general of the finance ministry's Fiscal Policy Office, said the new scheme was aimed at maintaining economic growth of at least 4% this year.

Copyright Agence France-Presse, 2007

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