Thailand sees more than 4% growth this year on property measures, ministry says

Thailand sees more than 4% growth this year on property measures, ministry says

By Orathai Sriring and Kitiphong Thaichareon

Thailand's economy is expected to grow slightly more than 4% this year, driven by measures to boost the property sector approved on Tuesday, the finance ministry said, as the government attempts to revive economic activity.

The measures are expected to lead to about 800 billion baht ($22 billion) in property trades, more than 400 billion baht in investment and 120 billion baht in consumption, Pornchai Thiraveja, head of the ministry's fiscal policy office, told a briefing.

"With the measures, the economy this year will grow a little over 4%," he said, adding the stimulus would lift growth by 1.7-1.8 percentage points.

Lavaron Sangsnit, the ministry's permanent secretary, said using fiscal policy to stimulate the economy was still necessary. "I hope the economy will return to appropriate growth levels again," he said.

Southeast Asia's second-largest economy expanded 1.9% last year, slower than 2.5% growth in 2022.

Prime Minister Srettha Thavisin said this week that the economy needed big stimulus measures, as the government also forges ahead with a delayed flagship "digital wallet" handout scheme worth 500 billion baht ($13.7 billion) in the final quarter of 2024 to boost consumption.

The property measures approved by the cabinet on Tuesday include reduced transaction fees for houses worth up to 7 million baht ($191,728), with ownership transfer fees and mortgage registration fees cut to 0.01%, from 2% and 1%, respectively.

The government will also offer home loans worth 30 billion baht from state banks, tax breaks for some property developers as well as tax deductions of up to 100,000 baht for people who want to build their houses.

Deputy Finance Minister Krisada Chinavicharana said the cabinet also asked relevant agencies to consider easing rules on foreign ownership of Thai property.

The ministry will also ask the central bank to relax loan-to-value rules for property, he added. Srettha earlier said the LTV rules should be removed.