FPO confident of growth despite weak export outlook

FPO confident of growth despite weak export outlook

The Fiscal Policy Office (FPO) remains firm that economic growth of 3.9% is achievable this year, driven by higher government spending and recoveries in consumption, private investment and tourism.

Ekniti Nitithanprapas, the FPO's deputy director-general and spokesman, said as of last Friday, 1.54 trillion baht of the fiscal-2015 budget had been pumped into the economy by government agencies and state enterprises.

In fiscal 2015, the government is expected to inject a combined 3.48 trillion baht into the economy.

Of that, 2.575 trillion baht is earmarked in the budget.

The rest will come from tied-over budgets and the government's economic stimulus packages involving myriad projects but excluding a 57-billion-baht borrowing plan recently approved by the cabinet to finance road and water management projects.

Mr Ekniti said the government's spending and stimulus measures had already affected the economy in the first quarter, with the FPO projecting economic growth of more than 3% year-on-year.

As of last Friday, the FPO reported 45.6% of the total fiscal budget of 2.575 trillion was disbursed, while disbursement of the 450-billion-baht investment budget reached 25.3%.

It also reported 38.8 billion of the 40 billion baht under the Thai Khem Khaeng stimulus programme of the Abhisit Vejjajiva government had been disbursed.

Mr Ekniti said tourism was also showing a clear growth trend.

Foreign tourist arrivals increased by 16% year-on-year in January, 29% last month and 27.6% this month as of last Friday.

However, the FPO projects export growth of only 1.4% this year, much lower than the Commerce Ministry's 4% forecast, citing a lack of signs of recovery in the economies of major trade partners.

"The Thai economy still has the potential for strong growth thanks to government efforts to promote investment in high technology and support the country in becoming a destination for regional headquarters and international trading firms," Mr Ekniti said.

"The government's planned special economic zones will also be instrumental to economic growth."

In a related development, tax collected by the Excise Department in the first five months of fiscal 2015 totalled 180 billion baht, exceeding the target by 5 billion.

Director-general Somchai Poolsavasdi said the surplus was due largely to higher tax collected from imported oil.

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