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ECONOMY
WICHIT CHANTANUSORNSIRI
The Finance Ministry is ready to increase deficit spending if economic growth this year falls below 5%, according to Finance Minister Surapong Suebwonglee. The fiscal 2009 budget, currently under review by Parliament, calls for expenditures of 1.835 trillion baht and revenues of 1.585 trillion, resulting in a deficit of 249 billion baht or 2.5% of gross domestic product. The 2009 fiscal year starts on Oct 1.
But Dr Surapong said that he was prepared to increase deficit spending for the new budget to as high as 3% of GDP to help prop up economic growth.
He said a higher deficit would not undermine the country's fiscal position and that public debt, now at around 38% of GDP, was comfortably below the 50% limit set under the law.
Policymakers had earlier projected economic growth this year of 6%, compared with 4.8% in 2007.
But the sharp increase in oil prices has increased inflationary pressure and taken a toll on consumer and business confidence. Political uncertainty has also led to declines in domestic consumption and investment, although exports are now projected to sharply outperform earlier targets, based on first-half growth exceeding 20% in US dollar value.
''The concern is that if growth falls below 5%, it could start affecting the job market and new graduates,'' Dr Surapong said. ''The government will develop new measures to help create jobs and increase household income.''
He said the government was also moving forward with its new coupon programme to help low-income residents. The coupons will be distributed nationwide to the poor and be redeemable for basic foodstuffs and consumer goods.
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