Thai PM Sees Pick Up in Tourism but a Big Tax Shortfall
Tourist arrivals in Thailand may fall less than was originally feared this year however tax revenue may be worse than expected due to the severity of the economic slump Thai Prime Minister Abhisit Vejjajiva said on Tuesday.
"We had expected the arrivals number to fall eighteen or twenty percent, but the latest projection is eleven percent," Abhisit told reporters after a weekly cabinet meeting.
He said tourism had started to recover after Government efforts to promote the sector, which employs 1.8 million people and accounts for about 6 percent of GDP.
It was badly hit by a week-long siege of Bangkok's main airports in November last year by anti Government protesters, which caused massive damage to the tourist and trade sectors.
Arrivals in the first eleven months of 2008 rose 1.7 percent from a year earlier to 13.17 million, much lower than the Government had forecast before the political unrest started. That compared with a 4.65 percent rise to 14.46 million for the whole of 2007.
Illustrating the impact of the airport closures, tourist arrivals dropped 21.2 percent in November -- the start of the peak season -- from a year before, after a 6.5 percent fall in October, official data showed.
Abhisit said tax revenue could fall at least 150 billion baht ($4.2 billion) below target in the current fiscal year to the end of September due to the global crisis.
In January, Finance Minister Korn Chatikavanij said tax revenue could fall 130-140 billion baht below the target of 1.59 trillion baht.
In the first five months of the fiscal year (October-February), taxes missed the target by 16.4 percent, with 452 billion baht collected
Thailand has been hit by both shrinking demand for its exports due to the global economic slowdown and weak consumer confidence after months of political unrest.
The Government and the central bank are in broad agreement on how to tackle the economy with a combination of interest rate cuts and fiscal economic measures, including tax breaks, cash handouts and cheap utilities and transport for the poor.
The state planning agency projects zero economic growth at best and a possible contraction of up to 1 percent this year, after a 2.6 percent growth in 2008.
The Government is in the process of borrowing $2 billion from international agencies to help revive the economy.
Abhisit said the Government planned to spend 1.4 trillion baht ($39.15 billion) over the next 3 years to help the economy cope with the global crisis and its after-effects.
"The economic team considered projects for the next 2 to 3 years, which will focus on infrastructure," he said, giving no details but adding that economic ministers would consider the plan next week. ($1=35.77 Baht)
Source - Reuters