Thailand's finance ministry will propose an 80-billion-baht ($2.46 billion) plan to help spur its flagging economy, the finance minister said on Tuesday. The military took power in a coup in May to end months of protests that paralysed government, shook consumer confidence and took the economy to the brink of recession. The military government has since struggled to revive Southeast Asia's second-largest economy.
The economic plan will be presented to a meeting of economic ministers on Wednesday, and put before the cabinet for approval next week, Finance Minister Sommai Phasee told reporters. "This is additional to the annual budget to help the economy move forward," Sommai said. The ministry will ask the Government Savings Bank and Bank of Agriculture and Agricultural Co-operatives to lend 40 billion baht to village funds, Sommai said.
Agricultural communities have been hit by the junta's hard line on subsidies. The military wants to wean farmers off the generous hand-outs of former governments that have cost the state billions of dollars. The ministry also plans to borrow 40 billion baht for building and repairing roads across the country, as announced last month. Disbursement of the government's investment budget has been slow, at just 15 percent of the total planned for the current fiscal year, which began in October. By now, more than 40 percent of the investment budget should have been spent. Slower-than-expected investment spending is a major risk for Thailand's economic growth in 2015. J.P. Morgan expects the economy to grow 4.2 percent this year, with state spending on infrastructure contributing nearly a quarter of that growth.
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