INFRASTRUCTURE

Planned public infrastructure investments totalling over 2 trillion baht will focus primarily on strengthening the country's logistics networks, according to Somchai Sujjapongse, the director-general of the Fiscal Policy Office (FPO).

Investment would include new railway, road, waterway and air projects, he said.

The Fiscal Policy Office is finalising details of a bill authorising borrowing of up to 2 trillion baht to fund the investments over the next several years.

Mr Somchai said the bill was "90% complete", with only details regarding specific investment programmes remaining to be finalised by the Transport Ministry and the Public Debt Management Office.

He said the funding bill would also help finance some programmes such as improvements at border checkpoints to help support the Asean Connectivity initiative, a regional programme to help cross-border trade and logistics across the region.

The FPO estimates that the infrastructure investment programmes, together with existing plans to invest 350 billion baht in water management and flood prevention programmes, should help economic growth in 2013 reach 5.2%.

In any case, growth next year is expected to slow from the forecast 5.5% growth this year.

The FPO recently revised its growth estimates for 2012 downwards from an earlier projection of 5.7%, due largely to the impact of slowing exports as a result of the weakened US and European economies.

But Mr Somchai said global economic conditions should improve in 2013, with the FPO projecting a rebound for the euro zone to 0.5% growth compared with forecasts for a contraction this year.

Meanwhile, the Finance Ministry has estimated that public debt for fiscal 2013 would be 47.5% of gross domestic product. Debt service expenditures in the fiscal 2013 budget has been set at 7.4% of total expenditures.

The Finance Ministry's fiscal management framework calls for public debt to be capped at no more than 60% of GDP, with debt service expenditures limited to 15% of annual government expenditures.

Government spokesman Sansanee Nakpong said that for fiscal 2013, total new debt borrowing by the government and state enterprises is set at 959.39 billion baht, including borrowing to offset the projected 300-billion-baht budget deficit.

The government plans to issue new debt to restructure 737.6 billion baht in existing debt, and issue another 223.13 billion in debt for risk management purposes.

The investment budget for state enterprises was also set at 215.24 billion baht, with net profits projected at 79.78 billion baht, an increase of 13.5% from the year before. Cabinet members also approved new borrowing of 5.4 billion baht for the Bangkok Mass Transit Authority to pay for outstanding fuel and maintenance debts.