Thailand Plans Support Measures for High Oil Prices

The government of Thailand is preparing to implement a series of support measures designed to mitigate the economic impact of rising Brent Crude Oil prices. Finance Minister Ekniti Nitithanprapas announced on Friday that a specialized package will be presented during a cabinet meeting on Saturday, targeting sectors most vulnerable to energy cost fluctuations. These measures are expected to include direct support for welfare-card holders, the fisheries industry, and the transport sector, alongside soft loans aimed at assisting with fertilizer costs, solar panel installations, and the adoption of electric vehicles.

The state's Oil Fuel Fund is currently grappling with a deficit of 59.4 billion baht, which translates to approximately $1.85 billion at the current USD/THB exchange rate. Despite this financial gap, the Energy Ministry confirmed that the nation possesses sufficient oil reserves to last for roughly 110 days. Minister Ekniti emphasized that while the government aims to prevent stagflation, the available fiscal ammunition is limited.

\"The government will maintain fiscal discipline, but if needed, public debt could be allowed to exceed its ceiling of 70% of GDP.\"

The administration is also weighing a car trade-in scheme specifically for hybrid and electric vehicles as part of a broader effort to reduce fuel dependency. Minister Ekniti further clarified the government's stance on fiscal intervention during the briefing.

\"Any oil tax cut would be the last resort.\"

Meanwhile, Central Bank Governor Vitai Ratanakorn indicated that the policy interest rate would remain steady at 1.00%. The bank projects that economic growth could moderate to between 1.3% and 1.7% this year, with inflation potentially rising to a range of 2.5% to 3.5% depending on the duration of geopolitical conflicts in the Middle East.