Thailand is poised to experience growth of slightly over 4% this year, primarily driven by newly approved measures aimed at revitalizing the property sector, as announced by the finance ministry. The initiatives are anticipated to generate around 800 billion baht (equivalent to approximately S$29.6 billion) in property transactions, over 400 billion baht in investments, and 120 billion baht in consumption, according to Pornchai Thiraveja, head of the fiscal policy office within the ministry.
Thiraveja stated during a briefing that these measures would contribute to economic growth exceeding 4% for the year, with the stimulus expected to boost growth by 1.7-1.8 percentage points. Lavaron Sangsnit, the ministry’s permanent secretary, emphasized the continued necessity of using fiscal policy to stimulate the economy, expressing hope for a return to appropriate growth levels.
Thailand’s economy, the second-largest in Southeast Asia, expanded by 1.9% in the previous year, a deceleration from the 2.5% growth recorded in 2022. Prime Minister Srettha Thavisin highlighted the urgency of significant stimulus measures, coinciding with the government’s plans to implement a delayed flagship “digital wallet” handout scheme worth 500 billion baht in the final quarter of 2024 to bolster consumption.
The recently approved property measures include reduced transaction fees for houses valued up to 7 million baht, with cuts to ownership transfer and mortgage registration fees to 0.01%, down from 2% and 1%, respectively. Additionally, the government will provide home loans totaling 30 billion baht from state banks, offer tax breaks for select property developers, and grant tax deductions of up to 100,000 baht for individuals intending to construct their homes.
Deputy Finance Minister Krisada Chinavicharana noted that the Cabinet has tasked relevant agencies with exploring potential relaxation of regulations concerning foreign ownership of Thai property. Furthermore, the ministry intends to request the central bank to ease loan-to-value (LTV) rules for property, aligning with Srettha’s previous suggestion of removing such restrictions.
Source: The Business Times
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