Thailand approves bigger 2020 budget, debates start next week

[snoop1130]

Thailand approves bigger 2020 budget, debates start next week

By Orathai Sriring and Panarat Thepgumpanat

 

FILE PHOTO: Thailand's Prime Minister Prayuth Chan-ocha gives a speech as he attends Thailand-Korea Business forum in Bangkok, Thailand, September 2, 2019. REUTERS/Soe Zeya Tun

 

BANGKOK (Reuters) - Thailand's cabinet on Monday approved a slightly higher budget of 3.2 trillion baht ($105.12 billion) for the 2020 fiscal year to bolster Southeast Asia's second-largest economy, which is growing at its weakest pace in nearly five years.

 

The first reading of the bill in parliament is scheduled for next week, but it is not expected to be passed into law for four more months due to political delays. The fiscal year began on Oct. 1.

 

"The budget bill has been approved by the cabinet and it will be submitted to parliament today," Prime Minister Prayuth Chan-ocha told reporters.

 

Overall spending will be about 7% higher than the previous year's 3 trillion baht, with a deficit projected at 469 billion baht, or 2.6% of gross domestic product (GDP), up from the previous year's 450 billion baht gap.

 

Government investments are projected at 656 billion baht, or 20.5% of all spending, up from last year's 649 billion baht.

 

The budget bill is expected to be effective in early February, after gaining all approvals and the king's endorsement in late January, Budget Bureau chief Dechapiwat Na Songkhla told Reuters.

 

The budget has been delayed because Thailand only had its new cabinet in July after March's general election, though junta leader Prayuth, who took power in a 2014 coup, has stayed on as prime minister.

 

The budget bill needs to pass three readings in the lower house of parliament, in which the government has a fragile majority. The first reading is scheduled for Oct. 17-18, and second and third readings in early January.

 

Last week, Prayuth said he hoped the bill would be passed, otherwise "people in the whole country will suffer, farmers will suffer, not only me".

 

Nomura economist Charnon Boonnuch in Singapore said the slim majority "poses some threat" to the bill being approved.

 

"Any failure will not only imply a further slowdown in government spending but also heightened political uncertainty," he said.

 

Central bank Governor Veerathai Santiprabhob told Reuters on Friday that there were some projects such as public-private partnerships and investments by state-owned enterprises that were not constrained by the budget.

 

Like many of its trade-reliant neighbours in Asia, Thailand's exports have been hit hard by slowing global demand and the escalating U.S.-China trade war.

 

While waiting for the new budget, officials have said there will be some funds carried over from the past year, while current expenditure can proceed as usual. The government has also asked state enterprises, which use a financial year, to speed up their investments.

 

The government in August launched a $10 billion stimulus package, and said it would introduce more.

 

The central bank recently cut its 2019 growth forecast to 2.8% from 3.3%. Last year's growth was 4.1%, which lagged most regional peers.

 

-- © Copyright Reuters 2019-10-07

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[DrTuner]

Approve then debate. Yeah, Thai way or the highway.

[Thaiwrath]

7 hours ago, snoop1130 said:

Last week, Prayuth said he hoped the bill would be passed, otherwise "people in the whole country will suffer, farmers will suffer, not only me".

Farmers, and low income families, will always suffer a hell of a lot more than you and your cronies ever will.

Why use them as pawns, as if you care about them, in order to get your own way again ?

Edited October 7, 2019 by Thaiwrath

[RichardColeman]

10 hours ago, snoop1130 said:

Last week, Prayuth said he hoped the bill would be passed, otherwise "people in the whole country will suffer, farmers will suffer, not only me".

Warning or slip of the tongue ? 

[inactiveposter]

Can’t be a problem, there are still checks in my checkbook!

[graemeaylward]

Now let me try and understand this. The Thai fiscal year 2019 - 2020 started on Oct 1. The budget for that period has only just been drafted and the bill for parliament will have it's first reading next week. The second and third readings will not take place until January! Why? Surely this is a matter of some urgency. IF the bill becomes enacted as law, then it will not become effective until February! Two questions, is the budget for 8 months or 12? And where is the money coming from for the 4 months, October 1, to February 1? Presumably, all government departments and agencies will be unable to make any capital expenditure during this period! Will salaries be paid? No, sorry, I just don't understand!

 

 

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[Eric Loh]

12 hours ago, snoop1130 said:

Overall spending will be about 7% higher than the previous year's 3 trillion baht,

More borrowing and spending without any reciprocating results except for the military. 

[Chongalulu]

45 minutes ago, inactiveposter said:

Can’t be a problem, there are still checks in my checkbook!

What are you 'chequing' for? ???? 

[Srikcir]

6 hours ago, graemeaylward said:

Now let me try and understand this. The Thai fiscal year 2019 - 2020 started on Oct 1. The budget for that period has only just been drafted and the bill for parliament will have it's first reading next week. The second and third readings will not take place until January! Why? Surely this is a matter of some urgency. IF the bill becomes enacted as law, then it will not become effective until February! Two questions, is the budget for 8 months or 12? And where is the money coming from for the 4 months, October 1, to February 1? Presumably, all government departments and agencies will be unable to make any capital expenditure during this period! Will salaries be paid? No, sorry, I just don't understand!

 

 

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According to Budget Bureau Director Dechapiwat Na Songkhla, there had been enough unspent funds from the FY 2019 budget for the government to pay salaries and fixed costs for October 2018-December 2019.

 

On the other hand DPM Wissanu said that although the 2020 fiscal year begins in October 2019 and the budget for fiscal 2020 is behind schedule due to the change of government, the budget can be retroactive to October 2019.  https://www.thaipbsworld.com/cabinet-to-endorse-bt3-2-trillion-budget-for-2020/

 

Confusing. If both statements are true it would seem the budget for October 2019-December 2019 is funded from two sources (FY 2019 & FY 2020), essentially doubling the funding for that period?