Thailand's budget deficit to double

Thailand's budget deficit to double
A Thai police officer (L), Buddhist monk Luang Pu Buddha Issara (C), one of the anti-government protest leaders, and his supporters talk near the gates of Crime Suppression Division as he leads protesters in a rally in Bangkok on March 7, 2014.

The national budget deficit is projected to hit Bt500 billion in fiscal 2015, double this year's level, said the Budget Bureau, which will propose it to the next government, after the charter court ruled the current administration's Bt2-trillion loan bill unconstitutional.

A deficit equivalent of 4 per cent of gross domestic product will likely be designed to accommodate the government's investment plan more flexibly. This means the government will be able to raise loans of up to Bt500 billion.

Somsak Chotrattanasiri, budget director of the bureau, said yesterday that expenditure for 2015 would include some investments, part of the scrapped Bt2-trillion loan bill for infrastructure development, increasing the deficit for 2015 to Bt500 billion when compared with the Bt250 billion in 2014.

"How much the investment budget should be is up to the next government. But it will be on the condition that the borrowing will not exceed 20 per cent of the expenditure budget," he said.

However, an increase in the deficit would defer the plan to balance the budget by 2017.

Somsak said the bureau has already prepared the estimated expenditure for 2015 before conferring with three other agencies - the Finance Ministry, the National Economic and Social Development Board, and the Bank of Thailand.

The expenditure budget for 2015 was proposed at Bt2.7 trillion, up Bt200 billion from this year.

"When altering the investment plan, the development time frame will be stretched to 10 years from seven years of the investment plan under the Bt2-trillion loan bill," Somsak said.

In normal circumstances, the Cabinet would have passed the expenditure budget plan in May before seeking approval of the House of Representatives so as to become effective in October.

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