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Thai junta says wider budget gap no burden for future government
[BANGKOK] Thailand's military-led government will not leave its successor with large debts as a result of a 56 per cent increase in the budget defict planned for the next fiscal year, a deputy prime minister said on Monday.
The junta is struggling to revive Southeast Asia's second-largest economy after taking power in a coup in May to end months of political unrest.
It plans to increase the budget deficit to 390 billion baht (US$12 billion) for the fiscal year starting on Oct 1. The budget plan will be presented to cabinet for approval on Tuesday.
The junta is expected to call elections for some time next year, and has said it would steer clear of populist policies or costly projects that might burden a future administration.
"It won't (be a burden for them). The deficit is not that high, not even 3 per cent of GDP," Deputy Prime Minister Pridiyathorn Devakula told Reuters.
The new budget plan projects spending of 2.72 trillion baht (US$83.4 billion), up from the current year's 2.575 trillion baht.
The government is banking on infrastructure projects to lift growth as exports have been weak and consumption, which accounts for half of the economy, has been curbed by record-high household debt levels and shaky consumer confidence.
Many of the projects the government wants to complete were left over from the administration of ousted Prime Minister Yingluck Shinawatra, said government spokesman Yongyuth Mayalarp. They were projects needed by the population such as water management and rail infrastructure, Mr Yongyuth said.
"Our country's railway system needs a facelift," Mr Yongyuth told Reuters. "So we need to invest for many reasons... If we don't invest now then this will be a lost opportunity for the country."
Increased government spending was necessary to boost the economy, said economist Barnabas Gan with OCBC Bank in Singapore.
The central bank expects 2014 full-year economic growth to come in at 0.8 per cent, the weakest since devastating flooding in 2011. It predicts higher growth of 4 per cent for 2015.
The junta approved last October plans for stimulus measures worth a combined 364 billion baht aimed at creating jobs and income as well as helping farmers.
It also announced measures to help rubber farmers, who have been hurt by falling global prices.