Pheu Thai urged to tread carefully

Business > Economics

Central bank fears inflation, fiscal crisis

Published: 20/07/2011 at 02:48 AM
Newspaper section: Business

The new government risks stoking inflation and a fiscal crisis unless it carefully plans the framework for its lavish campaign promises and can collect more revenue to pay for them, warns Prasarn Trairatvorakul, the Bank of Thailand governor.

Current economic conditions, he said, did not warrant fiscal stimulus, unlike in 2009 when the Democrat-led government enacted a royal decree to approve additional borrowing worth 400 billion baht, on top of a fiscal deficit of 420 billion, to counter the impact of the global recession.

"The government of two years ago embarked on fiscal stimulus," Dr Prasarn said in an address to Thai Hire Purchase Association. "But now we expect the momentum of domestic consumption, investment and exports to be healthy in 2012. The necessity for fiscal stimulus should be gone, otherwise the government is sending a signal for stronger domestic demand that would push up inflation."

This article is older than 60 days, which we reserve for our premium members only.You can subscribe to our premium member subscription, here.

About the author

: Writer: Parista Yuthamanop; Position: Writer

Keep this article in your social bookmark:

Latest stories in this category:

Your comments

sirron
Post : 697
Send message

Discussion 2 : 20/07/2011 at 06:00 AM2
Post this to my Facebook
D1: Not so strange to me. Whatever their faults bilionaires are usually fiscally responsible and bureaucrats funnel money (even if they don't have it) to whoever put them in power.
Like dislike 0 people liked / 0 people disliked this comment
kaweeka
Post : 221
Send message

Discussion 1 : 20/07/2011 at 04:54 AM1
Post this to my Facebook
Funny stuff - looking at the charts provided you can see how the Thaksin administration was far more fiscally responsible, managing revenue vs expenditures far more in line with GDP growth. Compare that with the Democrats and their military-spending run amok and the delta between government expenses and revenue are enormous ... but hey, regardless, the new government should definitely watch out and make sure its policies can be backed with strong financials and fiscal responsibility.
Like dislike 0 people liked / 0 people disliked this comment

Pheu Thai urged to tread carefully | Bangkok Post: business