Additional B150bn to swell deficit
Supplementary funds for social assistance
The government plans to compile a supplementary budget of 150 billion baht for this fiscal year, a move requiring it to borrow an additional 100 billion baht and bring the fiscal 2018 budget deficit to 550 billion baht.
That amount would mean almost hitting the ceiling of 20% of annual and extra budget expenditure plus 80% of the budget for debt principal repayment set by law, and the deficit would be the largest since the military-backed government took power in 2014.
Most of the extra budget will be allocated to the welfare and subsidy scheme for the poor, farm sector reform and Village Funds, said Finance Minister Apisak Tantivorawong.
Of the total 150 billion baht, 100 billion will be earmarked to fund the second phase of the government's welfare and subsidy scheme for the poor (35 billion), farm sector reform (40 billion) and tambon-level development including Village Funds (10 billion), while 50 billion will go to pay back treasury reserves.
The government plans to borrow 100 billion baht for the supplementary budget, with 50 billion expected to come from greater-than-targeted revenue collection, Mr Apisak said.
State-led efforts to help the farm sector and low-income earners are part of a bid to make the economic recovery more broad-based this year.
Thailand has been in a fiscal expansion mode, running budget deficits for more than a decade. The Fiscal Policy Office recently set a goal of achieving a balanced budget between 2024 and 2026.
Mr Apisak said the Finance Ministry will draft a supplementary budget bill for fiscal 2018 and it will go before the cabinet next month before being forwarded to the National Legislative Assembly for deliberations by March.
The bigger budget deficit is crucial for fiscal 2018, Mr Apisak said, as the government wants to speed reforms to upgrade the country while maintaining the goal of a balance budget within 10 years.
In related news, Dechapiwat Na Songkhla, director-general of the Budget Bureau, said the bureau will seek cabinet approval next week for a 3-trillion-baht budget for fiscal 2019.
Under the annual budget, the government plans to bring in 2.55 trillion baht in revenue, leaving a deficit of 450 billion.
Investment budget accounts for more than 20% of the 3-trillion-baht total budget, he said, adding that the annual budget is based on the assumption that economic growth will come in at 4.2% in 2019.
As much as 1 trillion baht is to be allocated for reform purposes to narrow social disparity, upgrade the country to a digital economy and strengthen the grassroots economy, Mr Dechapiwat said.
The 1-trillion-baht budget will be earmarked for reform in many aspects, including the greying population, public health and big-ticket infrastructure, as well as greater expenses for the Social Security Fund and water management.
"The Finance Ministry has already prepared for the extra budget and source of funding because the government is aimed at undertaking agricultural sector reform seriously," said Deputy Prime Minister Somkid Jatusripitak.
The government is implementing the second phase of the welfare and subsidy scheme for the poor to help low-income earners cross the poverty line, he said.
"However, the next programme is very important because the government wants to implement farm sector reform," Mr Somkid said. "Farmers must learn which crops they should grow and the way to access the market to receive better prices. A part of the extra budget will be allocated to restructure the farm sector."
The cabinet on Tuesday approved 35.67 billion baht for the second phase of the welfare and subsidy scheme for the poor, aiming to help about 1 million people cross the poverty line this year.