Abhisit Confident Thailand Coalition Will Pass Budget

[churchill]

Thailand’s seven-party coalition is strong enough to pass a borrowing plan and next year’s budget to help lift an economy facing its first recession in 11 years, Prime Minister Abhisit Vejjajiva said.

“We might have some disagreements on certain issues on how things might be implemented, but it’s all done in good faith,” Abhisit, 44, said in an interview in Bangkok today. “We are confident we can resolve any differences.”

Abhisit has pledged to reconcile competing political groups who have taken over streets, airports and government offices in a bid for power since the army ousted former Prime Minister Thaksin Shinawatra in a 2006 coup. He plans to call an election after the military-drafted constitution is amended, a process that could take months or years.

The prime minister has boosted spending to revive Southeast Asia’s second-largest economy, which he said may shrink between 4 percent and 5 percent this year. The political turmoil that left two dead last month dragged consumer confidence to the lowest level in more than seven years as the global recession crimped demand for Thailand’s automobiles, electronics and rice.

Economy, People ‘Hurting’

“We’ve seen some encouraging signs like the slowing down of layoffs and orders picking up in some sectors, but we can’t be complacent,” Abhisit said. “The economy is still hurting, people are still hurting.”

While achieving growth in the second quarter will be “complicated” after riots in Bangkok last month, the government “will do whatever we can” to ensure economic expansion by the last three months of the year, he said.

The cabinet yesterday approved a 1.7 trillion baht ($49 billion) budget for the next fiscal year starting in October, down 8 percent from this year because of revenue shortfalls. Earlier this month it unveiled a 1.4-trillion baht, four-year investment plan to boost gross domestic product by the end of 2011 by about 10 percent from last year’s value.

Opposition lawmakers have held up government plans to borrow 800 billion baht from local banks to finance the budget shortfall and small-scale infrastructure projects. The borrowing is “absolutely crucial” to create jobs, Abhisit said. Transportation, water-supply, alternative energy, health and education projects would employ as many as 2 million people, he said.

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