Thailand plans larger deficit from outbreak as budget debate starts

[snoop1130]

FILE PHOTO: Thailand's Prime Minister Prayuth Chan-ocha arrives before a family photo session with new cabinet ministers at the Government House in Bangkok, Thailand, March 30, 2021. REUTERS/Athit Perawongmetha/File Photo

 

BANGKOK (Reuters) - Thailand's parliament started debate on Monday on a budget bill that projects a bigger 700 billion baht ($22.41 billion) deficit for the 2022 fiscal year starting Oct. 1, as the government attempts to revive an economy hit by coronavirus outbreaks.

 

The country's latest, most severe outbreak has accounted for more than 80% of its total infections and 90% of deaths and it has yet to start mass COVID-19 vaccinations.

 

Southeast Asia's second-largest economy may grow 1.5%-2.5% this year, the state planning agency forecast earlier this month. The budget plan sees growth of 2.5%-3.5%.

 

"There are limitations and risks that could affect Thailand's economic recovery in 2021," Prime Minister Prayuth Chan-ocha told the House of Representatives, which plans to debate the first reading until Wednesday.

 

"There remains uncertainty over the situation of COVID-19 outbreaks at home and overseas that may be more severe and continue longer than expected," he said.

 

The 700 billion baht deficit is up from the 609 billion baht deficit for the current fiscal year.

 

The budget projects spending of 3.1 trillion baht ($99.23 billion), down about 5.7% this year. The gap comes from lower tax revenue, expected at of 2.4 trillion baht.

 

Opposition leader Sompong Amornvivat said the budget bill did not adequately address the coronavirus crisis.

 

"People are suffering from COVID-19 ... but I don't see any clear plans or strategies on how to handle that," he said.

 

The bill's second and third readings are expected in August.

 

The budget planners have assumed the economy will grow 4.0-5.0% in 2022.

 

-- © Copyright Reuters 2021-05-31

 

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[smedly]

time to dip into the already unhealthy foreign reserves which will dilute the Thai baht and drive it lower - that is of course if the foreign reseves kitty is still intact 

 

I have my doubts 

[Soikhaonoiken]

Let's put a lot of blame on the covid-19 outbreak, this Government was sending Thailand into debt before covid arrived, by spending money on submarines and weapons, and of course having snouts in the trough..... 

[RichardColeman]

 

9 hours ago, snoop1130 said:

The budget planners have assumed the economy will grow 4.0-5.0% in 2022.

Be honest if Thailand opens fully by end of the year, I'm pretty confident of +10% next year - assuming this year is a write off again with minimal tourism Q4.

 

That said, I have this awful fear the tourists are about to be fleeced to make up the huge borrowing.

[Fex Bluse]

It's highly doubtful tourism will recover even by next year. I'd say it will take 2 full years from the time the pandemic is under control in all the major countries Thailand gets tourists from. 

 

No time soon

[hotchilli]

15 hours ago, snoop1130 said:

"There are limitations and risks that could affect Thailand's economic recovery in 2021," Prime Minister Prayuth Chan-ocha told the House of Representatives, which plans to debate the first reading until Wednesday.

Whatever happened to those huge reserves Thailand boasted on having?

[John Drake]

Time to crack open the piggy bank, lower rates, and stop hoarding foreign reserves to benefit the 0.01 percent. Do something for the people of the country, not just the billionaires who want to buy property and businesses abroad.

[Hayduke]

9 hours ago, hotchilli said:

Whatever happened to those huge reserves Thailand boasted on having?

 

Those aren’t Thailand’s foreign reserves…those are the PM’s foreign reserves.