Fiscal budget sufficient to cope with lockdown

Fiscal budget sufficient to cope with lockdown

Public Health workers from the Bangkok Metropolitan Administration conduct coronavirus tests at Klong Toey market in Bangkok on Wednesday. (Photo by Wichan Charoenkiatpakul)
Public Health workers from the Bangkok Metropolitan Administration conduct coronavirus tests at Klong Toey market in Bangkok on Wednesday. (Photo by Wichan Charoenkiatpakul)

Thailand's economy can withstand another round of stringent lockdown measures because of the remaining ammunition in the fiscal 2021 budget, says the Finance Ministry.

For the fiscal 2021 budget, the government has an expenditure budget of 3.284 trillion baht, with a budget deficit of 623 billion, said Krisada Chinavicharana, the finance permanent secretary.

The leftover sum of the 1-trillion-baht emergency loan decree stands at 600 billion, while the combined investment budget of state-owned enterprises totals 300 billion, said Mr Krisada.

"The remaining amount can still take care of the economy if we can control the outbreak," he said.

Mr Krisada said the Finance Ministry has yet to fully borrow loans that breach the law on fiscal deficit.

According to the law related to the fiscal 2021 budget, the ministry is allowed to seek loans at a maximum of around 700 billion baht, he said.

The treasury reserves under the fiscal 2021 budget also stand at 570 billion baht, said Mr Krisada.

Approved in April, the 1-trillion-baht loan decree is aimed at shoring up the economy during the coronavirus crisis.

Of the amount, 600 billion baht is for implementing health-related plans and giving financial aid to affected individuals. The remaining 400 billion baht is for economic and social rehabilitation through projects aimed at creating jobs, strengthening communities and building community infrastructure.

The public debt level will rise to 57% of GDP upon borrowing the full amount under the loan decree.

The public debt-to-GDP ratio stood at 49.5% as of October, with a value of 7.83 trillion baht, according to the Public Debt Management Office. The sum is considered the highest public debt threshold since the 1997 Asian financial crisis, when public debt to GDP climbed to 47.8%.

Deputy Prime Minister Supattanapong Punmeechaow said the government will have to sustain economic recovery momentum in the first half of 2021 as the efficiency of the Covid-19 vaccine is expected to take at least six months to yield tangible results.

Thailand's portfolio investment will be changed next year, with a focus placed on green energy and digital technology for future development, said Mr Supattanapong.

Investment in new industries is expected to appear in 2022, but some outlays should happen next year, he said.

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