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The package will first be used to help farmers, unemployed factory workers and new college graduates.

Of the budget, Bt63 billion will be allocated for crop insurance schemes to help shore up the price of 11 agricultural commodities so that better earnings boost farmers' purchasing power.

As for the jobless and new graduates, the government aims to initially train 250,000 of them and give them jobs for three to six months once they return to their home provinces. Later, if these trained personnel wish to start their own businesses, they will be offered loans - a maximum of Bt50,000 per person - from state-owned banks.

The second step would be helping the export and tourism industries as well as small- and medium-sized enterprises that have been hit hard by the global economic crisis and domestic political chaos.

Third in line will be the real-estate sector, which will be helped to clear its inventory through tax incentives and mortgage insurance services from the state-owned housing bank for low- and medium-income home-buyers.

The fourth group that will benefit are senior citizens aged 60 and over, who will get a monthly allowance of Bt500. And last but not least, the government will spend an additional Bt30 billion per year to increase school subsidies to help reduce the burden on parents.

According to an investment bank, the latest stimulus package comes on top of the earlier fiscal and monetary measures, which were expected to boost the country's GDP by 0.6 to 0.7 per cent this year.

On the monetary side, the Bank of Thailand had previously cut its policy interest rate by 100 basis points to the current 2.75 per cent, as the inflationary threat was sharply reduced amid the higher risk to economic growth.

Research shows that there remains an absence of strong domestic demand, which otherwise could provide a cushion in the event of an export-market collapse.

This was evidenced by a breakdown of key manufacturing indices by both export and non-export clusters.

In addition, private consumption and private investment indices have shown weaknesses consistent with the manufacturing indicator.

Research suggests that fiscal and monetary stimuli should help ease the risk of weak export and domestic markets.

As for export-oriented industries that ship out more than 60 per cent of their output, they posted a single-digit growth in September (9.2 per cent year-on-year) and October (5.9 per cent year-on-year).

However, this industry cluster, which includes food exports such as canned pineapples, and the export of integrated circuits, recorded an 8 per cent year-on-year drop in November - the first in 2008.

The latest figures for this segment were more than sufficient to confirm that the global downturn has finally hit the Thai export sector.

While both fiscal and monetary stimuli are expected to boost GDP growth in fiscal 2009 by 0.6 to 0.7 per cent, this may prove insufficient against the current backdrop of a still-unsettled political situation, investors' risk aversion and the global slowdown.

Therefore, the government should quickly approve an additional fiscal stimulus of Bt100 billion in budget expenditures as part of the mid-year supplementary 2009 state budget.

Apart from this amount, the government will have to accelerate the disbursement of another Bt120 billion in unused state budget earmarked for fiscal 2009. Last but not least, the rest of the funds for the Bt300-billion economic stimulus should come from capital expenditures of state enterprises.