Large budget deficit on the cards

Large budget deficit on the cards

The government will set a budget deficit of 390 billion baht for fiscal 2016 starting in October this year, up 140 billion from the current year.

While the private sector keeps Bangkok's horizon busy, the government is trying to do its part by investing more in large projects. (Photo by Patipat Janthong)

"This is necessary. We need to avoid adding to the fiscal burden. After all, our budget deficit is less than 3% of gross domestic product," said Deputy Prime Minister MR Pridiyathorn Devakula on Saturday.

Earlier, the Finance Ministry planned a budget deficit in a range between 320 billion and 400 billion baht. Since MR Pridiyathorn, who is in charge of the economy, wants investment to make up at least 20% of the fiscal 2016 budget, or 534 billion baht, a large budget deficit is necessary.

For fiscal 2016, the ministry projected revenue of 2.33 trillion baht and expenditures of 2.72 trillion. Although the increase in the revenue forecast is almost negligible from 2.32 trillion baht in the current fiscal year, revenue collection in fiscal 2015 will be short of the forecast. The fiscal 2016 revenue projection is 7% higher than actual revenue collection, under the scenario the economy expands by 4.2% a year.

Finance Minister Sommai Phasee said a large budget deficit was instrumental in sustaining the economy given a higher burden of debt repayment and investment in various areas such as public health and education.

The Finance Ministry has cut the budgets of several agencies which it believed had sought more than they needed to set an example for others on prudent budgeting, he added.

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