Low-income groups could receive hand-outs and debtors of state-owned banks have their loans restructured if Finance Ministry pump-priming goes ahead as suggested.

Nipon Poapongsakorn, adviser to Finance Minister Chalongphob Sussangkarn, will meet a team of experts tomorrow to discuss grass-roots economic-stimulus measures.

He was worried the sharp economic slowdown would hit the poor hard.

One option being considered is more hand-outs to the older poor, who currently receive just Bt300 a month. The team will explore working with non-governmental organisations in allocating funds directly.

The team will advise the Finance Ministry to monitor local-government spending.

Nipon said the measures could be introduced shortly.

Thailand Development Research Institute director Somchai Jitsuchon proposed state-owned banks restructure customer debt and offer debt-repayment rescheduling.

However, debt-restructuring has to focus on target groups and not be offered to all as by the former government, Somchai said.

Target groups should be self-employed and non-salary labourers, he said.

Small and medium-sized companies hard hit by an appreciating baht should be included, he suggested.

Small construction projects employing non-salaried workers could be started by the government, he added, as both urban and rural poor need help.

The Finance Ministry will be asked to fund social projects managed by Deputy Prime Minister Paiboon Wattanasiritham, he said. Monitoring will ensure transparency of public spending via state-owned banks.

Meanwhile, Finance Ministry spokesman Somchai Sujjapongse said that if the Bank of Thailand cut its policy rate, state-owned banks or special financial institutions (SFIs) could lower lending rates to help clients.

He believed SFIs would lend more to support the economy as average non-performing loans were at 8 per cent of outstanding debt, a figure he described as "not high".

SFIs would extend new loans to support target industries and services, such as tourism, food, energy and public utilities, he said.

Somchai is chairman of the SME Bank, which last week approved new loans worth Bt3 billion for super-prime and prime borrowers.

The bank aims to issue new loans worth Bt35.5 billion this year, he said.

Disbursement of state spending coupled with SFI lending should get the economy going, Somchai said.

The ministry thinks the economy will grow between 4 per cent and 4.5 per cent this year. Somchai said it should grow 6 per cent.

Wichit Chaitrong

The Nation