The Government is implementing an action plan, “The Strength of Thailand 2009,” which involves investment projects under the Stimulus Package 2 program, aimed at spurring the Thai economy.

The Cabinet, during its meeting on 6 May 2009, acknowledged the Stimulus Package 2 program, proposed by the Ministry of Finance. It came after the Stimulus Package 1 scheme won Cabinet approval for implementation in January 2009.

Finance Minister Korn Chatikavanij said that the global financial crisis had a great impact on the Thai economy, resulting in a sharp fall in production and exports. Private spending is likely to shrink considerably. However, Minister Korn said that Thailand’s economic situation was starting to pick up, as the Government had implemented various measures, such as those under the Stimulus Package 1 program, to revive the economy.

In the face of uncertainties in the global economy, he said, the Government needed to launch the Stimulus Package 2 program to cope with the situation. The Strength of Thailand 2009 action plan would help stimulate the economy on a continual basis, create more job opportunities through the Government’s investment projects, and enhance the country’s competitiveness in the long run.

The Stimulate Package 2 program involves a fund of 1.43 trillion baht and will be carried out from 2009 to 2012. It is expected to generate employment for 1.6 million to two million people.

Out of the fund, 571.5 billion baht will be used to support transport and logistics projects, which will cut the country’s logistics costs, now standing at 19 percent of GDP. A fund 238.5 billion baht will be spent on water resource management and agriculture, 138 billion baht on education, 99 billion baht on public health, and 18.5 billion baht on tourism infrastructure development.

The Cabinet also approved the executive decree empowering the Ministry of Finance to secure extra loans to carry out the second stage of the economic stimulus program.

According to the Ministry of Finance, the extra loans are expected to increase the level of Thailand’s public debt from 40 percent of GDP now to 60 percent of GDP in 2013. Even so, economic returns from these investment projects are likely to spur the Thai economy and increase Thailand’s production. As a result, the country’s public debts would begin to decline from 2014 onward and would stand at 47 percent of GDP in 2018. This would show the country’s ability to maintain debt sustainability.

Minister Korn said that the Government was on the right track in implementing economic stimulus measures, which would not create fiscal burdens in the long run. He was also confident that the new round of the economic stimulus package would contribute to the continued growth of the Thai economy.