A national development strategic plan has been conducted to accelerate Thailand's economic growth by at least 1.5 percentage points a year from the 4.5% average, said Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong.
The country's gross domestic product averaged 4.5% in the past decade. Without a strategic plan to support development, growth will be stuck at this level, Mr Kittiratt said.
Speaking at the government's seminar on the country strategic plan and fiscal expenditure in 2014, the deputy prime minister said the 2-trillion-baht investment would be spent during 2013-2020 to develop infrastructure.
It should help expand gross domestic product by 1.5 percentage points a year throughout the period.
The planned 2-trillion-baht borrowing would reduce the current account surplus, reining in the strong baht.
At the same time, the investment would push up inflation, which now stands at 3%, by 20 basis points.
In response to the high public debt concerns, the finance minister said the borrowing would not be higher than 50% of GDP, well below the 60% ceiling set by the ministry.
The public debt payment against expenditure ratio will also not exceed 12%, compared to the 15% limit.
He added that Thailand's investment in infrastructure has been low for a long time, resulting in declining competitiveness for four consecutive years.
The country's investment against GDP was at 21.4%, compared to Malaysia (23.5%), Singapore (23.8%), Indonesia (24.8%) and Vietnam (34.9%).
"Before the 1997 financial crisis, Thailand's public investment was as high as 40% of GDP. The investment budget has declined since then. In the past decade, our investment was lower than the standard level of 25%," said Mr Kittiratt.
GDP in 2013 would grow by 5.5% while inflation would be at 3%, he said. "If we can achieve this, our budget will be balanced in the next three years as targeted."
About the author
- Writer: Wichit Chantanusornsiri
Position: Business Reporter