Thailand asks IMF for room to maneuver<\/p>\n
LONDON: The Thai government has asked the International
\nMonetary Fund (IMF) to relax its tough prescription after
\nadmitting that the aftermath of the Asian crisis will squeeze the
\ncountry's economy more than initial estimates suggested.<\/p>\n
The government says that the economy may shrink by as much as
\n5.5 percent in 1998, compared with an earlier forecast of 3.5
\npercent.<\/p>\n
It wants to increase public spending on anti-poverty programs
\nto soften the impact and has asked to run a higher public sector
\ndeficit than agreed in the bail-out deal with the fund last year.<\/p>\n
This week the government passed four emergency decrees to
\nraise revenue to help restore the battered financial sector, but
\ncritics said they amounted to a bail-out for the rich.<\/p>\n
In response to the criticism, the government announced a 25
\nbillion baht (about US$620 million) supplement to the budget for
\njob creation and poverty alleviation.<\/p>\n
Citing the \"sharper than expected\" deterioration in the
\ncountry's economic health, the letter to the IMF asked for a
\nrelaxation of the terms of the promised reforms. It asked the IMF
\nto permit a budget deficit equal to 3 percent of Thailand's gross
\ndomestic product in fiscal 1998, up from 2 percent.<\/p>\n
It also said it would seek a \"cautious reduction\" in interest
\nrates if the Thai baht stays stable for the remainder of the
\nyear.<\/p>\n
Some economists have contended the high-interest, tight-money
\npolicy is harsh and stifles the growth that might lead to
\nrecovery.<\/p>\n
Thailand was the first Asian country to be hit by the
\nfinancial crisis which swept through the region almost a year
\nago.<\/p>\n
Speculators began attacking the baht in May last year and in
\nearly July the government was forced to break its peg to the
\ndollar, setting off a wave of currency depreciations amongst its
\nAsian neighbors.<\/p>\n
The massive devaluation has failed to stimulate exports which
\nwere expected to help drive the economic recovery. Tuesday's
\nforecast says exports will grow only 1.4 percent in dollar terms,
\ncompared with an initial estimate of 6.2 percent.<\/p>\n
Unemployment is expected to rise to more than 2 million this
\nyear, more than 60 percent up on a year earlier.<\/p>\n
-- Guardian News Service<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/thailand-asks-imf-for-room-to-maneuver-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }