Thailand budget earmarked for economic stimulus

The GOVERNMENT has set aside a significant portion of the central budget to finance economic stimulus measures that are likely to be necessary in the first and second quarters of this year to maintain growth momentum.

The deputy prime minister in charge of economic affairs, Somkid Jatusripitak, has instructed the Budget Bureau to reserve an unspecified amount for such measures, as there are already signs that the global economic recovery this year will not be as good as what the economic team expected earlier.

The central budget for fiscal year 2016 was set at Bt402.13 billion (S$15.8 billion), or 14.78 per cent of the overall state budget worth Bt2.72 trillion.

"The deputy prime minister told the meeting that the 2016 fiscal budget would be mainly used to support economic reform towards a more domestic-led economy so that the budget is not wasteful and is directed towards the building of local infrastructure," said Government Spokesman Major Sansern Kaewkamnerd.

This infrastructure includes water-supply sources and processing facilities for agricultural and value-added products along with increased coverage and speed of the Internet in rural areas via the National Broadband Strategy.

"He said the Budget Bureau had been instructed to reserve some of the central budget to be used to maintain the economic momentum … as the global economic recovery is not going to be as good as expected," Sansern said.

Somkid has told the Cabinet that the Thai economy in the first quarter would be affected by the slower-than-expected recovery of the global economy. The disbursement of the fiscal budget was a vital part of maintaining economic momentum until the third and fourth economic quarters, when capital from government spending on mega-projects is expected to start entering the economic system.

Somkid has not said how much of the central budget should be kept until then, Sansern said.

Meanwhile, Budget Bureau director Somsak Chotrattanasiri, said around 30.22 per cent of the Bt2.72-trillion fiscal budget had been disbursed in the first three months of the 2016 fiscal year (October-December), which was slightly better than the target of 30.16 per cent.

Around 14.5 per cent of the Bt390-billion investment budget (excluding the central budget) was disbursed in the same period, which was around 3 percentage points better than last year.

About 34-35 per cent of the investment contracts have been signed, which is 16 percentage points higher than last fiscal year.

"The disbursement rate this year should be able to meet the 96-per-cent target that was set for this fiscal year. The disbursement rate of the investment budget is also expected to meet the target of 87 per cent, judging from the overall picture of the contracts that have already been signed," Somsak said.