Investment needed to spur economy

The government must invest around 65 billion baht in mobilising the economy if it wants the to hit the 4% growth target for 2013, an academic said on Tuesday.

Sakon Waranyuwattana, a lecturer from the economics faculty at Thammasat University, said there is a possibility that the economy will slowdown in the second quarter of the year.

He said both domestic consumption and private investment indices were declining, particularly the manufacturer production index which is showing clear signs of contraction.

It is possible that gross domestic product growth for 2013 will not reach 4% as expected, which would trim the government’s revenue from tax collection to lower than the target for the year, he added.

Over the first eight months of 2013 fiscal year, the government’s revenue totaled 1.1 trillion baht, 2.7% higher than the target, on the back of an increase in excise taxes on cars - boosted by the first car scheme, liquor and tobacco, said Mr Sakon.

After tax rebates for first-time car buyers, it is unclear how much the net revenue will remain, he added.

The economist said the government would need a 515.94 billion baht investment budget to spur the economy this year,  if the economic expansion rate is to reach 4%.

The government is currently planning to invest 450.37 billion baht in various projects, therefore an additional investment budget of 65.57 billion baht is needed, he said.

Related search: Sakon Waranyuwattana, economist, Thammasat University

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