Finance minister adamant on Thailand's fiscal stability
Finance Minister Arkhom Termpittayapaisith insists Thailand still has enough fiscal stability to support the government to grow the economy despite the double whammy of soaring food and oil prices driven by strong demand and the Russia-Ukraine war.
The finance minister cited statistics as of March 10 that showed the government's treasury tallied 418.58 billion baht in the first five months of fiscal budget 2022 (October 2021-February 2022), down by 97.64 billion baht from 516.22 billion baht in the same period of the last fiscal year.
The government has delivered a total of 901.41 billion baht worth of revenue to the state treasury, slightly dropping by 3% from 934.80 billion baht in the same period of the previous fiscal year.
According to Mr Arkhom, state expenditure in the first five months tallied 1.42 trillion baht, up by 1.6% from 1.40 trillion baht in the same period of the last fiscal year.
Despite a drop in the government's treasury, Mr Arkhom said the treasury still has stability and is sufficient for the government to manage the economy to grow.
He expected the government's treasury status will get much better given the higher collection of income tax and personal income tax in April and May.
The government is still maintaining its revenue forecast for this fiscal year at 2.4 trillion baht.
Nonetheless, Mr Arkhom admitted the inflation rate was relatively high in January (3.23%) and February (5.28%) driven largely by soaring food and energy prices.
He said the government needs to implement additional measures to reduce energy and food prices in order to curb the inflationary pressure this year.
More monetary policy should be also implemented to allow room for the country's economic growth. The Monetary Policy Committee is scheduled to meet late this month to decide its policy rate.
Mr Arkhom also insisted Thailand still has ample liquidity worth as much as 2.5-3 trillion baht, while foreign reserves amounted to US$245 billion in February.
The country's debt-to-GDP ratio in January was 59.9% which remains manageable and lower than under the fiscal sustainability framework.
Deputy Prime Minister Supattanapong Punmeechaow said he expected the conflict in Europe will be settled within three months, adding the government has also already prepared advance measures to help low-income earners and ordinary people over the next three months.
"The government has yet to make a decision regarding additional borrowing. If the conflict becomes prolonged for over three months, the government may have to secure additional lending," said Mr Supattanapong.