Finance Minister Sommai Phasee and the Bank of Thailand may have scaled back expectations for economic growth to below 1% this year, but the Fiscal Policy Office (FPO) remains optimistic that the 1% level is achievable if fourth-quarter growth is at the top end of its forecast.
The Finance Ministry's think tank projects final-quarter growth of 3-3.2%, assuming that exports — accounting for 70% of GDP — deliver zero growth, said director-general Kritsada Jinavijarana.
Kritsada: Increase in revenue collection
The economy contracted 0.5% in the first quarter before bouncing back to rise 0.4% in the second quarter and 0.6% in the third quarter.
Mr Sommai this month admitted the economy was likely to grow by less than 1% after Deputy Prime Minister MR Pridiyathorn Devakula had projected final-quarter growth of 2.5-3%, while the central bank last week slashed its growth forecast to 0.8%.
The FPO believes that GDP growth will come in at 4% next year, underpinned by the government's economic stimulus and public investment. Exports are expected to grow 3.5%.
Mr Kritsada said higher-than-targeted revenue collection and borrowing could be used as sources of funding if the government intended to spend more to revitalise the lacklustre economy through the mid-year budget.
The Budget Procedures Act authorises the government to arrange budget expenditure in addition to the annual budget, but it requires the state to source funding.
Exports and private investment lost growth momentum in November, while private investment and tourism boded well for the economy.
Revenue from value-added tax (VAT) edged higher by 0.6% year-on-year in November compared with October's contraction of 1.7%.
Motorcycle sales last month declined 12% from a contraction of 7.6% in October due largely to the steep fall in prices of farm products, especially rubber.
Revenue from tax related to property transactions shrank 12.6% compared with a contraction of 2.9% in October.
State agencies drew down budget of 525.5 billion baht during the October-to-November period, representing 20.4% of the 2.575-trillion-baht annual budget expenditure for this fiscal year — marginally below the 21% target.
Budget disbursement during the first two months of this fiscal year, however, was 10.3% higher year-on-year.
If a 47.9-billion-baht carryover budget is taken into account, state agencies spent 573.4 billion baht, up 11.5%.