Thai PM proposes US$102 billion budget to parliament
THAI Prime Minister Srettha Thavisin on Wednesday (Jan 3) announced a US$101.52 billion budget for the second half of the current fiscal year, kicking off a three-day debate among lawmakers.
“The budget is crucial in moving the economy forward,” Srettha told parliament.
South-east Asia’s second-largest economy is expected to grow 2.7 to 3.7 per cent this year, he said, adding that inflation is expected to be between 1.7 to 2.7 per cent.
The new budget for the second half of the fiscal year ending September 2024 sees a 9.3 per cent rise in spending and a drop of 0.3 per cent in the budget deficit to 693 billion baht (S$26.8 billion) from the previous year.
This year’s budget was delayed from last year due prolonged political gridlock following a May election. A new government was formed in August. The proposed budget does not include some items already allocated for the first half of this fiscal year, such as civil servant salaries.
About a quarter was allocated to addressing social issues like an ageing population, enhancing education and expanding universal healthcare, Srettha said.
A NEWSLETTER FOR YOU
Friday, 8.30 am
Asean Business
Business insights centering on South-east Asia's fast-growing economies.
The lower house will vote on the budget this week and it is expected to be ready by early May.
About 11.3 per cent is allocated to accelerating competitiveness, including energy security, digital economy, and future industries like electric vehicles, Srettha said.
Thailand’s economy grew much a weaker-than-expected 1.5 per cent in the July-September quarter from a year earlier, the slowest pace this year, on soft exports and government spending.
The government’s US$14 billion policy to give 10,000 baht to nearly all Thais for spending in their local communities was not included in the budget, but would be considered in separate legislation.
While presenting the budget, Srettha said the central bank should take into account the risks the nation’s economy faces, including its fragile recovery when deciding monetary policy.
Decade-high borrowing costs at 2.5 per cent “may affect the nation’s economic recovery and the well-being of the people,” Srettha said in his speech to parliament.
Bank of Thailand has raised the benchmark repurchase rate by 200 basis points over a 13-month tightening campaign based on the assumption of a “good” economic recovery, the premier said. Inflation, which is forecast to fall for a third straight month in December, is a reflection of a slowing domestic economy, he said.
“The monetary policy going forward should be in line with economic trend, tighter financial conditions and additional boost from the government policies,” Srettha said. On the fiscal side, he said, incurring a budget gap will help support the economy. REUTERS, BLOOMBERG
Share with us your feedback on BT's products and services
