Ministry rejigs mid-term fiscal plan

Ministry rejigs mid-term fiscal plan

Move follows B500bn borrowing decree

A man walks past a closed Thai massage shop on Lat Phrao Soi 1 during the Covid-19 pandemic. (Photo by Arnun Chonmahatrakool)
A man walks past a closed Thai massage shop on Lat Phrao Soi 1 during the Covid-19 pandemic. (Photo by Arnun Chonmahatrakool)

The Finance Ministry is set to adjust its mid-term fiscal plan following the government's implementation of the 500-billion-baht borrowing decree, said a ministry source who requested anonymity.

The source said the revision is in line with the likelihood of lower government revenue this fiscal year.

This mid-term plan, which covers 2022-2025, was approved by the cabinet last December and serves as the master plan in directing the monetary and fiscal budget, as well as state annual expenditure and public debt management.

The 500-billion-baht loan decree was published in the Royal Gazette recently, following the 1-trillion-baht emergency loan decree issued last year.

The loans are likely to raise the government public debt level higher than previously expected.

The Public Debt Management Office projected the public debt-to-GDP ratio at the end of fiscal 2021 at 58.6%, assuming the government fully disburses the 1 trillion baht and spends 100 billion from the fresh 500-billion loan.

The source said the government's revenue forecast for this mid-term fiscal plan might change because revenue for fiscal 2021 could fall short of the government target by 200 billion baht.

During the first seven months of fiscal 2021, the government collected net revenue of more than 1.22 trillion baht, some 128 billion below the target.

Government revenue depends mainly on economic recovery.

Under the mid-term fiscal plan, the Finance Ministry expects the government to post revenue of 2.40 trillion baht in 2022, 2.49 trillion in 2023, 2.62 trillion in 2024 and 2.75 trillion in 2025.

The plan calls for the government to have expenses of 3.10 trillion baht in 2022, 3.20 trillion in 2023, 3.31 trillion in 2024 and 3.42 trillion in 2025.

The outstanding public debt-to-GDP ratio is expected to be 56% in 2022, 57.6% in 2023, 58.6% in 2024 and 59% in 2025.

The debt level depends on the economic expansion every year.

The economy expanded 2.3% in 2019 before contracting 6.1% last year following the outbreak.

The Finance Ministry downgraded its forecast for economic expansion this year to 2.3% from 2.8%.

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