Thai govt to speed up budget spending to boost growth
The government will accelerate disbursement of the state investment budget and implement other stimulus measures to boost the country’s economic growth rate to 3-3.2 per cent this year, according to Finance Minister Sommai Phasee.
So far, only 53 per cent of the Bt449-billion (S$17.5 b) state investment budget for fiscal 2015 ending this September has been disbursed.
Sommai, who yesterday chaired a committee tasked with economic stimulus and following up on national investment projects, said the body was set up by Prime Minister Prayut Chan-o-cha on July 14 after growing criticism his military-led regime’s handling of economic affairs.
Earlier, the embattled finance minister was less optimistic, saying growth of gross domestic product could fall below 3 per cent this year on a significant 4.84-per-cent drop in exports in the first six months.
To revitalise the sluggish economy, Sommai said state-budget disbursement would be speeded up in the remaining two months of fiscal 2015 and in fiscal 2016. But he noted that a further cut in the Bank of Thailand’s policy interest rate would not be helpful at this stage in terms of boosting economic activities.
Sommai said his committee was responsible for compiling all major government investment schemes and stimulus efforts so that the government could help speed up implementation. “As the steering committee, we will also inform the prime minister every month of the progress of these projects. The first update will go to the next Cabinet meeting on August 4,” he said.
He said the target of 96-per-cent budget disbursement should be met in October. As of July 24, around Bt2.04 trillion had been disbursed out of the total Bt2.575 billion.
Around Bt236 billion or 53 per cent of the total Bt449-billion state investment budget has been disbursed so far.
The government will also push for faster implementation of infrastructure schemes, which are worth a combined Bt1.95 trillion over the next two years. In addition, Bt920 billion worth of off-budget loans and ongoing urgent stimulus measures to help farmers and low-income earners who have been affected by drought, and job-creation projects worth a combined Bt157 billion, will be accelerated.
The investments highlighted under the Transport Ministry’s infrastructure projects are the two high-speed dual-track railway projects worth Bt741 billion, and six standard-gauge dual-track rail projects covering 887 kilometres worth Bt127 billion.
In addition, urgent loans for development of water management and road transport are still ongoing. Contracts worth Bt23.915 billion have been signed and the plan is to disburse around Bt30 billion in December, while contracts for the remaining projects worth Bt7.605 are expected to be signed by August 14, he said.
Meanwhile, the Thailand Future Foundation has suggested that the Kingdom shift its export focus to the Greater Mekong Subregion rather than old trade counterparts like the European Union countries and Japan to brace for what it calls the “new normal”.
The foundation, which was set up by a group of leading businesspeople over the past few years and has former finance and commerce minister Somkid Jatusripitak – also a member of the junta-backed government on economic affairs – as a chairman of the board, yesterday revealed its latest study on “Thailand’s new normal”.
Sethaput Suthiwart Narueput, director and secretary of the foundation, said the “new normal”, which was defined as a new paradigm of the lower pace of economic growth, meant that Thailand was likely to experience annual GDP growth of not more than 3 per cent from now on. This phenomenon is just like what is happening in the global economy, especially in the United States, Japan and China.
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