B450bn budget deficit repeats
The state budget for fiscal 2020 is set at 3.2 trillion baht, up 200 billion baht from fiscal 2019 ending Sept 30, 2019, with a budget deficit of 450 billion baht equal to that of the previous fiscal year.
Yesterday's joint meeting of the Bank of Thailand, the National Economic and Social Development Council, the Budget Bureau and the Fiscal Policy Office, chaired by Prime Minister Prayut Chan-o-cha, approved the annual budget plan for fiscal 2020.
The fiscal 2020 budget is based on real economic growth of 4% in 2020, excluding inflation.
Dechapiwat Na Songkhla, the Budget Bureau director, said the 2020 budget plan will be forwarded to the cabinet for approval this coming Tuesday.
He said the budget deficit of 450 billion baht remains within the government's fiscal and monetary framework, which requires the deficit not to exceed 20% of annual expenditure and sets the deficit ceiling at 710 billion baht.
The cabinet on May 27 approved a medium-term fiscal plan (2019-21) as required by the new Fiscal Responsibility Act, which puts more restrictions on government off-budget loan-seeking legislation.
The medium-term fiscal plan calls for the government to run a budget deficit of 450 billion baht in 2018 and 2019, 452 billion in 2020 and 524 billion in 2021.
Under the plan, the government must increase tax collection and reduce infrastructure spending through public-private partnerships and the Thailand Future Fund.
The government forecasts GDP growth of 4.2-4.7% in 2018, 3.9-4.9% in 2019 and 3.5-4.5% in 2020 and 2021.
Revenue collection is envisioned at 2.45 trillion baht in 2018, up from 2.55 trillion in 2019, rising to 2.74 trillion in 2020 and 2.77 trillion in 2021.
Public debt is expected at 6.92 trillion baht, accounting for 42.6% of GDP in 2018, rising to 7.63 trillion, 8.46 trillion and 9.28 trillion in 2019-21 and reaching 47% of GDP in 2021.
The plan aims to reduce the budget deficit from 2022 onwards because of better efficiency of revenue collection and decreased expenditure.
The Fiscal Responsibility Act, enforced since last April, is designed to maximise budget spending and prevent politicians in the future from repeatedly using off-budget borrowing to finance projects, particularly pork-barrel schemes.
Mr Dechapiwat said the prime minister also asked related agencies to monitor the efficiency of budget disbursement to conform with the national 20-year strategy plan.