Low disbursement rate hinders economic expansion

BANGKOK, 5 March 2010 (NNT) – The low disbursement rate has been cited as the main factor hindering economic expansion.

Deputy Prime Minister in charge of economic policy, Trairong Suwannakhiri, said the Thai economy would gradually improve in the form of a “Pipe Shape” rather than “V Shape” as the nation still relied on partner countries such as USA, EU and Japan. He expected a clear movement in 2012.

According to Mr Trairong, the government previously adopted the loan decree as an economic resolution. He stressed that the expansion was likely stuck with inefficient disbursement.

Recently, a disbursement was made at 43 billion THB or 26% of the total 190 billion THB, while 52% or around 150 billion THB was disbursed from the economy stimulus budget. If no disbursement was made by the end of March, all project proposals would be canceled. The government, however, is considering whether the budget can be reallocated.

In addition, the International Monetary Fund (IMF) forecast a 4.7% expansion in the Thai economy, while the Office of the National Economic and social Development Board expect 3.5-4.5% growth. Mr Trairong stated that an expansion of 4% should be a satisfactory level. The expansion will be at a lower rate compared to Malaysia as 5% improvement is expected there.