The Finance Ministry wants to give the sickly economy a Bt7-billion injection by next month to keep it running at a growth rate of 4-4.5 per cent.

"If there are no measures, the economy might not grow as we had expected. And that would hurt other sectors, especially employment," Pannee Sathavarodom, director-general of the Fiscal Policy Office, told a press conference yesterday.

 The ministry will propose the spending plan to the economic team of ministers and top authorities on Monday before submitting it to the Cabinet for implementation as early as May.

The Finance Ministry's top officials met yesterday to discuss ways to sustain economic growth at the targeted rate. At a separate meeting, Finance Minister Chalongphob Sussangkarn said the government felt the need to shift the economy into higher gear.

"Now, the Finance Ministry is trying to work with various agencies to assist the economy at the grassroots level. The economy is in a downward trend. It's necessary to prop it up," he said.

Deputy Prime Minister Kosit Panpiemras said the interest rate should be lowered further to whip up economic activity. The Bank of Thailand has trimmed the key policy rate by one percentage point so far this year. Another cut is expected at the next meeting of the central bank's Monetary Policy Committee on May 23.

Lower interest rates would be a more effective way to revive the economy than fiscal measures, he said.

"Most of the economic sectors could be taken care of by monetary policy through sufficiently low interest rates and surplus liquidity in the financial system," he added.

Pannee said the Finance Ministry would help expedite public disbursements by asking other ministries to propose plans to spend unused budgets, estimated at about Bt7 billion, or 5 per cent of the government's investment budget.

"Now, national economic growth needs to be sustained, otherwise, it will have a domino effect," he said.

Finance Ministry spokesman Somchai Sujjapongse said the ministry was striving to assure the targeted growth rate is met without having to set its sights lower.

"We will wait until next month to consider whether to revise the rate, based on variables such as the interest rate, oil prices, exchange rate and the economies of our trading partners," he said.

Assuming an exchange rate of Bt35.5-Bt36.5 a dollar and Dubai oil prices at US$56-$58 (Bt1,947-Bt2,016) a barrel, the targeted growth rate should be achievable, he added.

The planned extra funds would be used to cushion the grassroots economy, take care of problems caused by decelerating growth, stem the slowdown in the machinery and construction sectors, speed up the budget disbursement of state enterprises, rebuild confidence in the economic sector and promote problem-solving in the three southernmost provinces.

The measures should not be called "stimulus" because they are aimed at shoring up growth at the targeted level, Somchai said.

Pannee said that among the measures was maintaining the value-added tax rate at 7 per cent beyond September, when the rate is subject to revision.

Also, the special business tax might be cut to increase revenue for municipal authorities, while the transfer fee on condominiums should be maintained at the current level.

Local municipalities should release their Bt110-billion budget to pump money into rural areas, he added.

Veerathai Santipraphob, an economist from Siam Commercial Bank, said political parties and government agencies should lay down the economic structure for the future to draw a clearer picture for the economy and boost investor confidence.

"Over the past five years, these agencies simply followed the policies set by political parties. Therefore, they have reduced their roles in terms of setting the economic agenda.

"Now the political sector doesn't spell out a clear economic policy. Everyone is talking about the past, without taking a middle- to long-run view of the economy. Now the political parties and agencies should point out the economy's direction and demonstrate their tangible contribution to advance the economy."

Meanwhile, a UN Economic and Social Commission for Asia and the Pacific (Escap) survey released yesterday predicted the economy to grow 4.7 per cent this year, lower than last year's 5 per cent. However, the growth rate could slide due to political tension, it said.

Escap's survey also said the Kingdom should brace for increasing economic vulnerability, driven by continued currency fluctuations and inflationary pressure from higher oil prices.

The survey also showed Thailand as experiencing the greatest fall in domestic demand of all East Asian countries, by 19 per cent in 2000-2006 when compared to pre-1997 crisis levels. Slowing private investment is partly attributable to shortages of capital funds, it added.

"The stock of private domestic credit as a percentage of GDP [gross domestic product] declined after the crisis. Credit shortage was very evident in Thailand because loans were allocated more for consumption. The share of individual consumption loans to total loans in Thailand reached 24 per cent in the first half of 2006, up from 12 per cent between 2000 and 2005," the report said.