BANGKOK- Thailand’s cabinet on Tuesday approved tax measures to boost domestic tourism during the low season, Deputy Finance Minister PaopoomRojanasakul said.
The measures, which cover the period from May to November, include tax deductions for companies organizing conventions and seminars, he said.
Additional measures were designed to increase domestic travel to secondary cities, including allowing income tax deductions for home stay and non-hotel accommodation expenses.
Prime Minister SretthaThavisin said the measures would cost the government 1.5 billion baht ($41 million) in revenue, but said the benefits would be greater.
Thailand’s economy is expected to grow 2.5 percent this year, but should be expanding at least 3.5 percent annually, its finance minister Pichai Chunhavajira said last week.
Pichai was addressing a media briefing after a meeting of economic ministers chaired by the prime minister. He said stimulus was required to jumpstart the economy and help was needed to boost credit access for small businesses.
Thailand trimmed its economic growth forecast for 2024 earlier despite a better-than-expected expansion in the January-March quarter, saying exports were projected to increase at a slower pace than previously thought due to external risks.
Southeast Asia’s second-largest economy grew 1.5 percent in the first quarter from a year earlier, data from the National Economic and Social Development Council (NESDC) showed, beating analysts’ expectations for a 0.8 percent expansion in a Reuters poll .
In the final quarter of 2023, gross domestic product (GDP) expanded an annual 1.7 percent.
On a quarterly basis, GDP grew a seasonally adjusted 1.1 percent after a revised 0.4 percent contraction in the final quarter of 2023, avoiding a technical recession. Economists had forecast a 0.6 percent expansion from the previous three months.
Growth was driven by exports and private consumption and investment, but public investment and government expenditure contracted, the state planning agency NESDC said in a statement.
“Thailand’s economy rebounded in Q1 and we expect steady, if unspectacular, growth this year driven by a further rebound in tourism and strong government spending,” Capital Economics said in a note.
The NESDC now expects GDP growth of between 2.0 percent and 3.0 percent for 2024, slightly lower than its previous forecast of 2.2 percent to 3.2 percent. Last year’s growth was 1.9 percent.
