BANGKOK (Reuters) – Thai Prime Minister Srettha Thavisin told Reuters the central bank should cut its key interest rate by at least a quarter point this week as the government forges ahead with a flagship handout scheme worth 500 billion baht ($13.6 billion) to revive Southeast Asia’s second-largest economy, which lags the region.
The “digital wallet” programme will be rolled out in the final quarter of the year but will not be financed by a loan bill, Srettha said on Sunday, adding that the funding sources will be finalised at a meeting on Wednesday, the same day as the central bank’s monetary policy meeting. The central bank has so far resisted government pressure to ease policy, holding the key interest rate unchanged at 2.50% in February, the highest in more than a decade, in a split vote. Some economists expect a rate cut on Wednesday.
Srettha said the economy might have expanded less than 1% in the first quarter of 2024, following the annual 1.7% growth in the previous three months.
He also said the government plans to boost tourism, by hosting multiple large-scale events and creating tax incentives to draw in more tourist numbers and dollars, targeting 2025 as “the biggest year for Thai tourism”.
Srettha also said the government is exploring the use of nuclear power for electricity generation in the long-term as part of a plan to diversify to clean energy sources and draw in investment.
(Reporting by Panu Wongcha-um; Editing by Kanupriya Kapoor)
