January 28, 2020 / 10:32 AM / a month ago

UPDATE 1-Thailand plans steps to boost consumption, tourism

* New measure planned next month -finance minister

* Chinese tourists seen falling 2 mln this year-TAT

* Cabinet approves tax package to boost investment

* Ministry may reduce 2020 growth outlook (Adds detail, investment measures)

By Kitiphong Thaichareon

BANGKOK, Jan 28 (Reuters) - Thailand plans to introduce additional measures next month to boost consumption and tourism, its finance minister said on Tuesday, as the government tries to shore up a faltering economy potentially facing a sharp blow from the coronavirus in China.

Tourism, a key growth driver and previously the only bright spot in Southeast Asia’s second-largest economy, has been hit hard by China’s ban on all group tours.

China is Thailand’s biggest source of foreign tourists, with 11 million Chinese visitors last year accounting for 28% of the total. The Tourism Authority of Thailand expects Chinese visits to fall by 2 million this year.

“We have to admit that there must be an impact on the overall economy, as tourist numbers fall,” Finance Minister Uttama Savanayana told reporters.

He said government agencies were working on proposals for measures next month, which could include handouts or cash back to support spending on travel and consumer goods.

In a bid to spur business activity, the cabinet on Tuesday approved a package of tax incentives to encourage investment as exports have been weak and domestic demand soft.

The package is expected to attract investment worth more than 100 billion baht ($3.24 billion) and add to economic growth by 0.25 percentage point, said ministry official Lavaron Sangsnit.

The ministry is likely to trim its 2020 growth outlook, currently at 3.3%, when it reviews that on Wednesday.

The central bank forecast 2020 economic growth at 2.8%, slightly picking up from an estimated 2.5% in 2019, a five-year low.

Official 2019 growth data is due on Feb. 17. ($1=30.88 baht) (Writing by Orathai Sriring Editing by)

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