THE Thai business community has urged the government to come up with stronger measures to support companies and to assist with soaring operating and living costs in the country.
They fear many businesses and families will struggle with basic expenses amid high economic uncertainty this year, mainly driven by rising oil prices as a result of the United States-Iran military tensions.
With the issues in the Middle East, the price per barrel of crude oil could reach as high as US$80 this year.
The Bangkok Post said the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) held its monthly meeting on Wednesday and described global tensions, such as the US-Iran dispute and the US-China trade war, as the key concern for the economic outlook.
Thai Chamber of Commerce chairman Kalin Sarasin suggested five measures to help local companies and the public.
He said support measures were needed to reduce operating and living costs, and suggested a five per cent discount on power bills.
He also urged speeding up the process of value-added tax refunds for companies in the business sector within 30 days.
‘The JSCCIB calls for contributions to the Social Security Fund (SSF) to be reduced to 2.5 per cent from companies and employees for six months,’ Kalin said.
The SSF legally requires contributions from three stakeholders: insured employees (five per cent), enterprises (five per cent) and the government (2.75 per cent).
The JSCCIB also requested for a reduction in housing transfer and mortgage fees to 0.01 per cent for 12 months to stimulate the property market.
The panel called for a tax exemption on machinery imports for 12 months to help business operators with expansion and investment.
‘These measures are aimed at offsetting a myriad of negative risks from geopolitical and trade tensions, resulting in an unfavourable world economy,’ Kalin said.
Regarding US-Iran tensions, the JSCCIB forecast global crude oil prices to reach US$70 per barrel this year, but the prolonged situation could push prices to above US$80.
‘If the prices reach US$80 per barrel, business operators cannot afford this higher cost, which will limit their competitiveness.’
Federation of Thai Industries chairman Supant Mongkolsuthree said Thailand’s exports to the Middle East included cars and food products, accounting for some 3.5 per cent of total shipment value.
The JSCCIB also had high expectations that investment projects in the nation’s Eastern Economic Corridor will drive the country’s economy and build up investor confidence.
Another hope is that the country’s 2020 budget of 3.2 trillion baht, which Parliament is currently debating, will be approved.
‘Thailand has only those two factors to mobilise the overall economy, and the tourism sector should be supported further to beef up the GDP,’ Kalin said.
The JSCCIB sees Thailand’s GDP growing by 2.5 to three per cent this year amid continued risks and tensions from last year.
For this year, the panel forecast an export contraction of up to two per cent due to the US-China trade war, Brexit woes and the baht’s appreciation.