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Thailand unveils stimulus package to buoy economy.

BANGKOK, March 30 Kyodo Thailand's coalition government approved Tuesday a 130 billion baht (3.5 billion dollar) stimulus package designed to pull the Thai economy out of a deep recession. The package features radical spending measures financed by loans under Japan's Miyazawa aid plan for crisis-hit Southeast Asian nations and the World Bank, as well as tax cuts, Prime Minister Chuan Leekpai said in a nationally televised press conference to unveil the package. The premier said the government needs to launch the stimulus package to ensure that the country's economic growth will reach the 1 % target this year. ''It is still difficult to predict how many percent of positive economic growth we will achieve this year. Without the additional measures to stimulate the economy, we might not be able to achieve the positive growth as targeted,'' he said. Detailing the package at the same press conference, Finance Minister Tarrin Nimmanahaeminda said it includes a cut in the value-added tax rate from the current 10% to 7% for a two-year period from April 1 and exempt low-income earners and small enterprises from taxation. It also contains a cut in income taxes, a reduction in the fuel oil tax and cuts in prices of electricity and liquefied petroleum gas, Tarrin said. The package also includes 53 billion baht (1.45 billion dollars) in new government spending aimed at boosting domestic demand through labor-intensive investment projects in rural areas, Tarrin said. Of the total, 13 billion baht will be used to create jobs for some 486,000 poverty-line people in rural areas hard hit by the economic crisis and another 40 billion baht to purchase domestic goods and services for the rural projects, he said. The 53 billion baht expenditure is entirely financed by the World Bank and the aid initiative unveiled late last year by Japanese Finance Minister Kiichi Miyazawa. Thailand

will receive 600 million dollars in long-term loans with low interest from the World Bank. Japan will provide yen loans from the Export-Import Bank of Japan and the Overseas Economic Cooperation Fund (OECF) worth 600 million and 250 million dollars respectively. Turning to inflation, Tarrin said he expects the inflation rate to be as low as 2.5% this year compared to the peak of nearly 11% in the middle of last year.
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Publication:Asian Economic News
Geographic Code:9THAI
Date:Apr 5, 1999
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