The economy is poised for healthier growth in the second half of the year, with three significant financial injections planned to stimulate momentum.
According to new Deputy Finance Minister Paopoom Rojanasakul, the three injections comprise the remaining portion of funds from the fiscal 2024 expenditure budget to be disbursed in the next five months, disbursement of the fiscal 2025 budget starting on Oct 1, and a portion of funds from the digital wallet project, slated to begin spending in the fourth quarter.
The Fiscal Policy Office (FPO) estimated the economy will grow by 2.4% this year, excluding the impact of the digital wallet scheme.
On April 29, the FPO downgraded its economic growth forecast to 2.4% from 2.8%, citing four challenges, including sluggish exports, especially industrial goods.
The Manufacturing Production Index has contracted, particularly in categories such as automobiles and electronic circuits.
Furthermore, the agricultural sector has been hampered by droughts stemming from the El Niño weather phenomenon, while government budget disbursement is only beginning as the Fiscal Budget Expenditure Act was announced on April 26, six months after the fiscal year began.
The FPO also cut its export growth outlook to 2.3%, down from 4.2%, while lowering its inflation estimate to 0.6% from 1%.
However, the office noted if the digital wallet funds were allowed to be spent in the fourth quarter, expenditure in that period is estimated at 350 billion baht, which would raise GDP growth to 3-3.3% this year.
According to Mr Paopoom, the Finance Ministry will also propose to the cabinet measures to provide credit support for secondary city tourism, bolstering the premier's "Ignite Thailand" policy.
Regarding tax policy, he said he instructed FPO executives that in the current economic environment, it is inappropriate to burden the public with taxes. Instead, the focus should be on improving tax collection efficiency to increase state revenue, said Mr Paopoom.
In terms of monetary and fiscal policy, he said the Finance Ministry and Bank of Thailand should cooperate, pursuing mutual understanding to complement each other's policies and move forward together.
Mr Paopoom said in the past, the central bank and the government may have held divergent views on economic issues, meaning more dialogue is needed to ensure coordinated monetary and fiscal policy implementation.
"This means stepping on the brakes together when necessary, and accelerating together when needed. The Finance Ministry and the Bank of Thailand must engage in more dialogue," he said.
In a related development, Finance Minister Pichai Chunhavajira said yesterday he would soon meet with central bank governor Sethaput Suthiwartnarueput to find ways to collaborate on driving the economy forward, encompassing both fiscal and monetary policies that align with the nation's interests.