The Thai economy is poised for a growth rate slightly exceeding 4% this year, propelled by recent measures aimed at bolstering the property sector, as announced by the finance ministry. The approved initiatives, designed to revitalize economic activity, are anticipated to generate substantial activity in the property market, with forecasts indicating positive outcomes for investment and consumption.
According to Pornchai Thiraveja, head of the ministry’s fiscal policy office, the implementation of these measures is projected to stimulate approximately 800 billion baht ($22 billion) in property transactions, alongside more than 400 billion baht in investments and 120 billion baht in consumption. This stimulus package is expected to contribute significantly to the overall economic growth, lifting it by an estimated 1.7-1.8 percentage points.
Lavaron Sangsnit, the ministry’s permanent secretary, emphasized the necessity of employing fiscal policy to invigorate the economy, expressing hope for a return to favorable growth levels.
Thailand’s economy, the second-largest in Southeast Asia, experienced a modest expansion of 1.9% last year, a decline from the 2.5% growth recorded in 2022. Prime Minister Srettha Thavisin underscored the need for substantial stimulus measures to reignite economic momentum, including the implementation of a flagship “digital wallet” initiative valued at 500 billion baht ($13.7 billion) scheduled for the final quarter of 2024, aimed at bolstering consumer spending.
The recently approved property measures encompass reduced transaction fees for houses valued up to 7 million baht ($191,728), accompanied by tax breaks for certain property developers and tax deductions of up to 100,000 baht for individuals constructing their homes. Additionally, the government plans to offer home loans worth 30 billion baht from state banks and is considering easing regulations on foreign property ownership.
Deputy Finance Minister Krisada Chinavicharana disclosed that relevant agencies are evaluating potential relaxations in loan-to-value (LTV) rules for property, aligning with the prime minister’s earlier suggestion to abolish such regulations. These initiatives collectively reflect the government’s concerted efforts to stimulate economic growth and foster a conducive environment for investment and consumption in Thailand