Thai Govt's Emergency Budget To Be Increased

[webfact]

Govt's emergency budget to be increased

By The Nation

Banks and state financial institutions step in to offer aid to the flood-affected

The government plans to increase the emergency budget in the 2012 fiscal year, to equip the prime minister with greater financial resources for coping with natural disasters like the current floods in the South, Finance Minister Korn Chatikavanij said.

Korn said the disastrous floods had resulted in huge loss of lives, property, agricultural areas and fishery income.

The floods reflect climate change, which last year caused severe drought and two big floods. This highlights the need to set aside a bigger budget for the prime minister's emergency use. He noted that the central budget - set aside for general purposes - in 2012 could be raised, at the expense of budgets allocated for other purposes.

"The government upholds fiscal discipline but we also need to take into account necessity. In the past, central budgets have been allocated according to need. However, the situation is changing, with many unexpected incidents. The budgets must be increased," he said.

Korn expected that the remaining Bt15-billion central budget for 2011 fiscal year should be sufficient for the current floods, against Bt10 billion spent after the floods late last year. Within a week, the Transport Ministry is also expected to finalise the funds needed for road and railroad repairs. The repairs would be financed from regular budgets.

For fiscal year 2012, the central budget has been fixed at Bt280 billion, up from Bt260 billion in the previous year. Of the total, Bt55 billion has been set aside as an emergency budget that could be disbursed on the prime minister's order.

State-owned financial institutions were the first to come up with relief measures for flood victims, which are awaiting the Cabinet's approval on Tuesday. While TMB Bank launched its own efforts yesterday, Thai Bankers Association chairman Chartisiri Sophonpanich said that within one to two weeks banks would mount a collective effort to help their clients.

Siam Commercial Bank expects the Southern floods to continue for a brief period, which will result in a limited impact on the economy.

The eight provinces - Nakhon Si Thammarat, Surat Thani, Trang, Phatthalung, Chumphon, Songkhla, Krabi and Phang Nga - affected by the floods contribute 7 per cent to Thailand's gross domestic product.

"In the worst-case scenario, the GDP could be slashed by 0.05 per cent," it said, basing the estimates on the Agriculture Ministry's figures that about 700,000 rai (112,000 hectares) of agricultural areas, or 0.5 per cent of plantation areas nationwide, are affected.

Loss of tourism income is also possible. The eight provinces generate 8 per cent of national tourism income, but the floods took place at the end of the high season. SCB thus expected that in the worst-case scenario, Bt10 billion in tourism income would be lost and this would chop another 0.1 per cent off the GDP.

SCB maintains the GDP growth forecast at 4-5 per cent.

-- The Nation 2011-04-02

[asiawatcher]

Essential I think - these 'emergencies' will continue. I love the prediction impact on the economy will only be 0.05% - I mean most of the land central south has been inundated, crops lost, trees uprooted and access cannot be gleaned at present. Considering this area is the largest rubber and palm oil producing belt in Thailand - I think they may need to re-guess that figure.