Srettha touts new stimuli
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Srettha touts new stimuli

More talks with Bank of Thailand to come despite row

Prime Minister Srettha Thavisin attends the last day of the debate on the national budget bill for the 2025 fiscal year. The bill sailed through its first reading in the House of Representatives on Friday night. (Photo: Chanat Katanyu)
Prime Minister Srettha Thavisin attends the last day of the debate on the national budget bill for the 2025 fiscal year. The bill sailed through its first reading in the House of Representatives on Friday night. (Photo: Chanat Katanyu)

The government will roll out additional measures to stimulate the sluggish economy next week, Prime Minister Srettha Thavisin said on Friday.

He said he discussed a range of issues, including economic stimuli and the stock market with Finance Minister Pichai Chunhavajira on Thursday night.

"A big announcement on short-term, medium-term and long-term measures will be made on June 24 or 25," the prime minister said.

Asked if this will be good news, Mr Srettha said: ''Let's wait and see.''

He also said Mr Pichai will discuss the inflation target with Bank of Thailand (BoT) governor Sethaput Suthiwartnarueput.

Quizzed on how the government will respond after the BoT governor's disagreement with its efforts to adjust the inflation target, Mr Srettha said the talks are aimed at thrashing out their differences.

"It is the duty of Mr Pichai," the prime minister said, adding that adjusting inflation targets is one of several measures to stimulate the economy.

The government has been at loggerheads with the central bank for months over interest rates, with the prime minister calling for a rate cut to boost the economy.

However, the BoT held its key interest rate steady at 2.50% following a review earlier this month. The next rate review is on Aug 21.

In May, when Mr Pichai assumed office, he said he would look again at the 1% to 3% inflation target with the central bank.

The central bank has previously said that interest rates and the inflation target are currently both at appropriate levels.

The annual inflation rate in May was 1.54%.

The renewed talks come amid political uncertainty that has rattled markets, as courts hear several crucial cases, including one calling for the removal of the prime minister for appointing controversial politician Pichit Chuenban as a PM's Office minister.

Meanwhile, the opposition Democrat Party on Friday took aim at the government's budget bill for the fiscal 2025 during a debate in parliament.

Romtham Khamnurak, a Democrat MP for Phatthalung, said the budget seeks to borrow to finance the government's digital-wallet handouts, which would impose further debt on the country.

The fiscal 2025 budget includes a deficit of about 865 billion baht, up 24.9% from the figure earmarked for 2024.

The government will have to borrow to offset the deficit and almost reach the borrowing ceiling allowed by law, he said.

He added that total public debt tallied 11.3 trillion baht, equivalent to 62.5% of GDP, as of February and the figure is expected to climb to 70% in the coming months.

Under the 2025 budget, regular expenditure amounts to 2.7 trillion baht, compared to an estimated revenue of 2.88 trillion baht the government expects to collect.

"That's why the government has to come up with the budget deficit and try to borrow," Mr Romtham said.

He also said the 805-billion-baht central fund should be reserved for emergency spending only.

"But the government now plans to spend 152.7 billion baht from the central fund to finance its digital-wallet scheme," he said.

"The government is trying to push the scheme through regardless of warnings about potential financial risks," Mr Romtham said.

On May 28, the cabinet approved a budget bill worth 3.75 trillion baht for the 2025 fiscal year, starting Oct 1 and ending Sept 30 next year.

Some 152.7 billion baht was earmarked to fund the government's 500-billion-baht digital money handout.

The cabinet also approved a proposal to spend 122 billion baht from the 2024 fiscal budget for the same purpose.

As of press time on Friday, parliament had not yet begun voting on the 2025 budget bill. The three-day debate on the goverment's spending plan began on Wednesday morning.

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