Container ships are docked at Klong Toey port in Bangkok. Finance Minister Korn Chatikavanij said the Thai government will have more stimulus plans to help the economy, which may have contracted more than 20 percent in January amid slumping global de

Thai Prime Minister Abhisit Vejjajiva said the government plans to spend 2 trillion baht (US$56.6 billion) on mainly infrastructure projects in the next three to four years to boost investment and create jobs.

Vejjajiva’s two-month-old government has pledged to boost spending to support an economy forecast to grow in 2009 at the slowest pace in 11 years as exports and local demand weaken. The government said Tuesday it expects its 2010 budget deficit to widen by 12 percent as the global recession crimps revenue.

“The Thai economy has yet to reach the bottom,” Finance Minister Korn Chatikavanij said Wednesday. “The government will have more stimulus plans to help the economy.”

Thai exports may have contracted more than 20 percent in January amid slumping global demand, Chatikavanij said. That would be the third consecutive month of declines. The Commerce Ministry is scheduled to release customs trade data today.

Vejjajiva earlier announced a 116.7 billion baht budget to be spent on measures including cash handouts and training programs for the jobless to counter the economic slump in the short-term. The projects announced Wednesday are part of a longer-term spending plan that is separate from the earlier measures.

Foreign loans

“The funding will come from the budget and local and foreign loans,” Vejjajiva said. “We will also allow private companies to become partners in the projects.”

The government will start its cash-handout program in mid-March to help boost consumption. About nine million low-income earners nationwide will each receive a 2,000 baht cashier’s check from the government, Vejjajiva said.

“By April 8, everyone should get the money and they can use it,” Vejjajiva said. Many companies have agreed to give discounts when the checks are spent at their shops, he said.

Southeast Asia’s second-biggest economy contracted about 3 percent in the fourth quarter from a year earlier as exports and tourism slumped, Vejjajiva said February 16. The economy may also shrink in the first and second quarters of 2009 before rebounding in the second half of this year, he said.

The central bank forecast on January 23 the economy may expand no more than 2 percent this year, the least since a contraction in 1998.

Source: Bloomberg