Govt mulls extra public debt
The Finance Ministry is weighing the necessity of additional borrowing to offset the budget deficit for this fiscal year and has instructed all tax-collecting agencies to arrange a revenue-collection management plan to boost state coffers.
Whether additional borrowing is needed also depends on budget disbursement, Finance Minister Uttama Savanayana said. If budget withdrawals are lower than expected, this could offset decreasing revenue collection and the new borrowing may not be needed.
The government's revenue collection for fiscal 2020 is quite certain to fall short of target, as the pandemic has paralysed business activities, he said. Mr Uttama delegated tax-collecting agencies to plan revenue-collection management to boost income.
The 2020 annual budget expenditure has been set at 3.2 trillion baht, with a revenue target of 2.73 trillion baht, resulting in a 469-billion-baht budget deficit. This fiscal-year budget represents 17.9% of the country's GDP.
Last week, the cabinet approved a bill for the fiscal 2021 budget expenditure of 3.3 trillion baht and revenue at 2.67 billion, leaving a deficit of 623 billion.
The Revenue Department expects to lower its collection target for the next fiscal year because of lingering impacts from the pandemic, while the target for fiscal 2020 could also be far-fetched, said Mr Uttama.
The Bank of Thailand earlier this week reduced its economic outlook to a contraction of 8.1% this year, which is worse than the record contraction of 7.6% during the 1997 financial meltdown.