The Thai auto industry, which could be the hard-hit in the global recession, says the government must move aggressively to stimulate domestic spending as exports are sinking.
“I don’t want to say how bad the situation will be next year, but a two-digit fall in both domestic and export sales is very likely. It depends on how fast and effective the relief package is for us,” said Ninnart Chaithirapinyo, vice-chairman of Toyota Motor Thailand, in the Bangkok Post.
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“Today, we need an aggressive government that has the guts to implement decisive policy as soon as possible and it should be ‘extreme medicine’ that can halt the domino effect to the industrial sector now.”
“The government must have the guts to cut taxes now to help those with low incomes, who are the first to feel the pinch of an economic slowdown,” he said.
He also said he supports further cuts in interest rate, saying the Bank of Thailand has more room to manoeuvre now that the local benchmark is 2.75% while the US rate is between zero and 0.25%.
Car output in Thailand is projected to fall by 20% next year by the Federation of Thai Industry (FTI).
The Thai economy is said by analysts to be in for a very rough ride next year, as manufacturers announce production cutbacks amid falling orders and as the tourism sector prepares for a drop in visitor numbers. GDP forecasts for next year vary, but are mostly within the 0-3% growth range. This would make 2009 the worst year since the 1997 Asia financial crisis.
