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Byline: Parista Yuthamanop
Sep. 7--Encouraging new private investment rather than reliance on fiscal stimulus measures should be the priority for economic policy in Thailand and the region, economists argue.
Peter Warr, an economist from Australian National University, said low private investment was the biggest problem for the region.
"Fiscal policy should be secondary to encouraging private investment," he said yesterday, at the second of a two-day conference hosted by Chulalongkorn University on the monetary outlook for East Asia.
The sharp rise in non-performing loans in regional banking systems stemmed from over-investment and poor macro-economic management.
Dr Warr said post-crisis, the problem facing Thailand now was excess liquidity in the markets, a condition similar to that facing Japan.
In such an environment, fiscal policy would have only a limited impact in spurring growth.