With export prospects looking dim, the government is now pinning its hopes on state spending and private consumption to shore up the economy.
Deputy Prime Minister MR Pridiyathorn Devakula said the government must accelerate spending as quickly as possible, as only two engines were left to drive economic growth.
“Exports are no longer dependable,” he said. “What the government should focus on right now is revving up public spending and stimulating private consumption.”
MR Pridiyathorn expects the government’s budget disbursement and spending will run at full throttle by the second quarter.
As of Feb 27, 1.1 trillion baht or 42.7% of the total 2.575-trillion-baht budget for fiscal 2015 had been disbursed.
Disbursement of the regular budget totalled 1.01 trillion baht or 47.5% of the total of 2.125 trillion.
Of the investment budget, only 80.5 billion baht or 17.9% of the total of 449 billion had been disbursed.
The budget for fiscal 2015, which began last Oct 1, is up by 2% from fiscal 2014.
Disbursement of the investment budget is estimated to reach 30% by the end of this month after the government improved the approval process.
MR Pridiyathorn said 38.8 billion baht of the 40 billion allocated to help farmers had been disbursed.
The Bank for Agriculture and Agricultural Cooperatives has approved 20,000 to 30,000 applications from rubber farmers for soft loans worth not more than 100,000 baht per family in a scheme to convince them to grow other crops such as oil palms.
The government has also approved a budget of 3 billion baht to ease the drought impact in 3,052 tambons.
Each tambon will be entitled to 1 million baht to build projects such as small reservoirs. Full disbursement is expected next month.
A recent meeting of economic ministers also agreed in principle to allow the Finance Ministry to borrow an additional 40 billion baht from abroad to finance highway development and improvement as part of measures to spur the economy in the second half of this year.
"The government has now done its best to stimulate the economy, and any new measures are unlikely in the foreseeable future, as this would put more of a burden on public debt," MR Pridiyathorn added.