The atmosphere at Bangkok's Yaowarat market on Thursday as devotees of Thai-Chinese heritage purchase offerings such as cooked chickens, ducks and cuts of pork to celebrate the Chinese New Year Festival. (Photo: Nutthawat Wichieanbut)

The Finance Ministry recommends the government implement measures to improve the property sector and stimulate the economy, says Deputy Finance Minister Krisada Chinavicharana.

He said the ministry plans to use fiscal measures to help sectors that have been adversely affected by sluggish economic growth, in particular the property market.

Such measures will help to relieve the financial burden for those who want to own a home, particularly low-income earners, expanding effective housing demand and leading to improved economic stability, said Mr Krisada.

Recently the Board of Investment (BoI) approved real estate investment incentives for residential units priced at or below 1.5 million baht.

In addition, the ministry proposed to the Bank of Thailand renewing softer loan-to-value (LTV) limits for mortgage lending to let homebuyers take out loans of up to 100% of home prices as the property sector plays a vital role in driving the economy.

Since the eased LTV limits expired, obtaining mortgage approvals has become more difficult.

The regulator has not responded to the proposal.

Several fiscal measures have been implemented by the Finance Ministry to stimulate the economy, including a continuous budget deficit, BoI investment promotion measures and tourism promotion packages.

Mr Krisada said the central bank decision on Wednesday to maintain the policy rate at 2.5% aligns with economic conditions.

He suggested fiscal policy, which is the domain of the government, and monetary policy, determined by the central bank, should be synchronised.

However, Mr Krisada did not comment on whether it is time for the central bank to start cutting the policy rate.