"We still expect the MPC [Monetary Policy Committee] will cut the interest rate by 0.5 per cent during the meeting. At the same time, the Finance Ministry will also accelerate the budget disbursement to create a supportive environment for consumption and investment," Somchai Sujjapongse, the ministry's spokesman, said.

The MPC will meet on Wednes-day to consider the policy rate.

Finance Minister Chalongphob Sussangkarn called the first meeting with his advisers yesterday to discuss measures to boost spending among low-income earners, including debt restructuring and handouts to the elderly poor.

The ministry forecasts that the economy will grow at a slow pace in the first quarter of this year but should improve in the second quarter due to improvement in domestic consumption and public investment.

Chalongphob spent more than one hour yesterday evening discussing with his advisers how to stimulate the economy at the grass-roots level. The interim government is under pressure from the public, who blame the economic slowdown on the political situation. The grass-roots level has been affected the most.

Following the meeting, he said: "The Finance Ministry will concentrate on the grass-roots demography first, before considering whether to assist other business sectors, such as property."

The measures would be finalised during future meetings - and Chalongphob will meet his advisers again next week.

A source said possible measures include debt restructuring for low-income earners by the specialised financial institutions, such as the Bank for Agriculture and Agricul-tural Cooperatives. The government was also considering increasing handouts to the elderly poor.

Chalongphob said the ministry would consider whether to assist other business sectors, such as property. Possible measures include a reduction of property related tax.

He noted although the property market was sluggish, it was not the priority at this point because the property market was likely to be rejuvenated by a cut in interest rates by the Bank of Thailand next week.

The property market, an obvious indicator of the economic situation, has experienced a slowdown since the beginning of this year.

Chalongphob expected a sharp cut in interest rates would boost the property sector.

He said yesterday's meeting also discussed moves to promote transparency in the fiscal status. The ministry will host a seminar on the issue later this month.

Meanwhile, a Finance Ministry official said the ministry would not adjust its income target for fiscal 2007, in spite of lower-than-expected revenue collection in March, because the ministry could generate higher income from state enterprises.

Somchai said that although the Revenue Department had previously expected revenue collection might be Bt15 billion short of its original target, the ministry would not adjust the income target. It could find other sources of income to offset the shortfall, such as income from state enterprises and the Bt11 billion outstanding from the now-suspended two-and-three-digit lotteries.

Moreover, the Finance Ministry expected to get another Bt30 billion that the Exchange Equalisation Fund had made from attempts to stabilise the baht after the fund was abolished.

Somchai said that as a result, it was high likely the government's income in fiscal 2007 would reach Bt1.566 trillion, close to its original target.

It is expected state enterprises would submit Bt72.65 billion worth of income to the ministry, a rise of almost 20 per cent from last year.

Over the past five months of this fiscal year to February, state enterprises submitted Bt38.646 billion in revenue to the ministry, higher than the original target by Bt5.39 billion or 16 per cent.

Somchai said that if state enterprises were able to maintain their income at this level, chances were the Finance Ministry would seek additional income from this sector.

Wichit Chaitrong

The Nation