The Budget Bureau is planning to adjust the fiscal 2024 budget to reflect the priorities of the new government, says a Finance Ministry source who requested anonymity.
The Budget Bureau is preparing to discuss the draft Annual Budget Expenditure Act with the ministry, which the Prayut Chan-o-cha cabinet approved in principle in March, to see if there are any items in the budget that can be adjusted.
With a new government still to be formed, the Office of the National Economic and Social Development Council expects the draft 2024 budget starting on Oct 1 will likely be delayed and could be announced by the first quarter of 2024, or even the start of the second quarter.
The source said revision of the fiscal 2024 expenditure budget could be done in two ways: revising items of the Budget Expenditure Act or drafting an entirely new act that would require new projections of revenues and expenses, as well as an economic outlook.
For the fiscal 2024 budget, the government allotted 3.35 trillion baht for the expenditure budget, with 2.49 trillion baht as current expenditure, 71.7 billion baht for investment expenditure, 33.7 billion for principal repayment and replenishment of the treasury account balance, and public sector debt repayment of 11.7 billion.
The government plans to pursue an expansionary fiscal policy, allowing for a budget deficit, said the source.
Borrowing of 59.3 billion baht is projected to balance the budget deficit, while estimated GDP is 19.4 trillion baht.
The amount of new loans the new government can borrow is limited by the government's debt ceiling, set by the Financial and Fiscal Policy Committee at 70% of GDP.
As of March, the government's public debt outstanding was 10.8 trillion baht, accounting for 61.2% of GDP.
By the end of fiscal 2023, which is the end of September, the Public Debt Management Office forecasts government debt will rise to 61.7% of GDP, leaving room to borrow 8-9% of GDP, worth around 1.5 trillion baht in loans.
The increased government expenditure poses a huge burden for debt repayment.
The medium-term fiscal plan indicates the government's debt repayment budget continues to increase. In fiscal 2023 and 2024, it accounts for 9.63% and 11.5%, respectively, of the expenditure budget, and is expected to reach 16.2% in fiscal 2028.
In addition, the principal and interest payment budget also increase proportionally with rising government debt.
The principal payment budget is 3.14% of annual expenditure in fiscal 2023 and is projected to remain at 4% until fiscal 2028.