Thailand to keep budget deficit within 3% of GDP for 2024 fiscal year

THAILAND’S government is planning to keep its budget deficit to no more than 3 per cent of gross domestic product (GDP) in the 2024 fiscal year, the finance minister said on Tuesday (Dec 27), aiming for a deficit of 593 billion baht (S$23 billion).

Arkhom Termpittayapaisith also said the inflation target range of 1 per cent to 3 per cent was appropriate and monetary policy would ensure continued recovery of the economy.

The inflation target will help maintain price stability and keep medium-term inflation expectations anchored, he told a news conference.

Headline inflation was 5.55 per cent in November, far above the Bank of Thailand’s (BOT) target range, but Arkhom said it would gradually fall back to within the target in 2023.

The country’s public debt was expected at 61.35 per cent of GDP at the end of the 2024 fiscal year starting Oct 1, he said.

Thailand’s Cabinet on Tuesday approved the central bank’s headline inflation target of 1 per cent to 3 per cent for 2023, unchanged from this year.

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The central bank forecast average headline inflation of 6.3 per cent this year before easing to 3.0 per cent next year.

It said recently would continue to gradually raise its key interest rate for a while until the economy grew at its full potential and inflation returned to target.

It has raised the benchmark rate by a total 75 basis points since August to 1.25 per cent, and economists expected a further rate hike next month. REUTERS