The cabinet has approved the second phase of the Finance Ministry's 1.43-trillion-baht economic stimulus plan, Finance Minister Korn Chatikavanij said on Wednesday.
The plan would create jobs for about two million people through the state investment projects and raise long-term competitive advantages of Thai businesses, Mr Korn said.
He said the budget was initially projected at 1.56 trillion baht, and the second-phase investment plan would be implemented between 2008 and 2012.
The investment projects could be put into action immediately after the regulation authorising the Finance Ministry to seek loans for restoring and strengthening the economy receives endorsement by the House of Representatives, he said.
"The budget allocation will be mainly sought within the country since there is still sufficient liquidity.
"The government's financial status is still strong and the level of public debt is not very high," the finance minister said.
Although the budget allocation may cause the country's public debt to rise from 40 per cent of this year's gross domestic product (GDP) to 60 per cent in 2013, the returns would be worthwhile, he said.
He believed the level of public debt would start reducing in 2014 and should stay at 47 per cent in 2018.
Meanwhile, army commander-in-chief Gen Anupong Paojinda said the army would accept any decision the government makes to cut funding for the next fiscal year, even if it may affect weapons procurement and other plans.
The army would not have a problem with budget cuts because there were other issues of more pressing concern for the country at the moment, Gen Anupong said.
If the cabinet makes budget cuts, the committee responsible for allocating funds would evaluate which projects would be affected, he said.
Deputy Prime Minister Suthep Thaugsuban said earlier that cuts to the military budget might be necessary because projected government revenue was down on earlier estimates by about 200 billion baht.
He warned the reduction might affect weapons procurement plans, but said no decision had been made yet.
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