The International Monetary Fund (IMF) has urged the Thai government to drop its rice pledging scheme and scale back some other fiscal stimulus measures, as they are undermining confidence in the country’s finance.
In its annual review of Thailand 's economy, the IMF said it is inevitable for the government to incur losses as long as the scheme remains unchanged.
The government has spent about 670 billion THB since the programme began, buying rice at premiums of 35-50 percent above market rates. In July, the Commerce Ministry reported losses of 136 billion THB.
The IMF’s recommendations came after the rice pledging programme was renewed for the third year in October.
The IMF warned further that the government's deficit will rise to 3.4 percent of its GDP in the fiscal year that ended in September, thanks to lower corporate tax rates and tax relief measures. Besides, the overall public debt is likely to rise to 53 percent of GDP by the end of 2018.
As Thailand continues to face risks from volatile capital flows and an uncertain global environment, the agency said the government should ensure it has enough money to respond to shocks, by eliminating spending on populist schemes.
The Commerce Ministry responded to the report by saying that its fiscal position was strong and that its subsidy for the agricultural sector did not overwhelm the country’s economy.-VNA
In its annual review of Thailand 's economy, the IMF said it is inevitable for the government to incur losses as long as the scheme remains unchanged.
The government has spent about 670 billion THB since the programme began, buying rice at premiums of 35-50 percent above market rates. In July, the Commerce Ministry reported losses of 136 billion THB.
The IMF’s recommendations came after the rice pledging programme was renewed for the third year in October.
The IMF warned further that the government's deficit will rise to 3.4 percent of its GDP in the fiscal year that ended in September, thanks to lower corporate tax rates and tax relief measures. Besides, the overall public debt is likely to rise to 53 percent of GDP by the end of 2018.
As Thailand continues to face risks from volatile capital flows and an uncertain global environment, the agency said the government should ensure it has enough money to respond to shocks, by eliminating spending on populist schemes.
The Commerce Ministry responded to the report by saying that its fiscal position was strong and that its subsidy for the agricultural sector did not overwhelm the country’s economy.-VNA
