IMF calls on Thailand to ditch rice support scheme

Reuters ^ | 11/11/2013 | Reuters

[TexGrill]

(Reuters) - The International Monetary Fund called on Thailand to scrap its pricy scheme to support rice farmers and scale back some other fiscal stimulus measures in order to balance the budget and contain rising public debt.

In its annual review of Thailand's economy, the IMF also said the government should do a better job of supervising public banks and non-bank financial institutions, which pose growing financial risks.

As Thailand continues to face risks from volatile capital flows and an uncertain global environment, the government should ensure it has enough money to respond to shocks, the IMF said, according to a staff report prepared in early September and released on Monday.

Gross domestic product data to be released next week is likely to show Southeast Asia's second-largest economy has struggled free of recession.

But exports, which account for more than 60 percent of the economy, and private consumption remain weak, and analysts reckon the government will need to spend to strengthen the recovery.

The government says its fiscal position is strong, but spending on populist schemes is jeopardizing its commitment to balance the budget.

[TexGrill]

Global business tip

[RetiredTexasVet]

I guess when the IMF owns you they can talk down to you like that .... who says being a debt slave is not that bad!!!!

[JimSEA]

Rice farmers are a large and poorly treated voting block in Thailand. The government is trying to keep them at bay with price support without addressing the middleman local monopolies. Banking has low and high level corruption - kind of like here.

[SeminoleCounty]

The problem with Free Trade is that you run out of taxpayer money to subsidize it.

Thailand should just tell the IMF to blow off...and tariff all foreign goods if IMF retaliates. IMF is just Keynesian Free Trade liberals

[dfwgator]

Thailand?