Government suffers budget deficit in six-month time

[chiang mai]

This thread is the same as any others I've read over the years, any time there's even a hint of a financial loss somewhere, people come out of the woodwork with all kinds of one liners, insinuations and anti-Thai rhetoric, it's as though OP's such as this one are the green light to bash away! But most folks in their haste seem to overlook, if indeed they ever did look in the first place, the fact that successive governments having been running budget surpluses for quite some time and that foreign currency reserves are far higher than most western countries and unemployment remains very low. The fact that there is a global slowdown underway and Thailand does derive 60% of its GDP from exports, a deficit at this stage is not really that unusual, compare the Thai economic number sets against any Western country, debt, deficit or most any other factor and the Thai economy looks more than reasonable: http://www.tradingeconomics.com/thailand/indicators

Perhaps it's for the reasons stated above plus others that the forecast for a global recession sees Asia as the least likely candidate. So perhaps before you guys simply bash away for the sake of bashing, you might want to look a little more objectively and unemotionally at the numbers. Could the country do better? Certainly it could and on many fronts, it's lost some competitive advantage in a couple of areas to other regional countries but that's not necessarily a permanent loss and neither is it necessarily a bad thing, competition is often a great incentivizer.

[marcusd]

What exactly are they spending on?

Most of the really big ticket infrastructure projects at the national level are still in the planning/environmental stages AFAIK, and haven't progressed to the actual awarding of construction contracts or actual construction work, as yet.

However, I'm not sure about the exact status of the plans for buying the submarine they so desperately want/need...

That's the 1.57 trillion baht question!

They spent a truckload fighting the drought, there was that housing project, but I'm not sure of any other big ticket projects. It would be very interesting to see where this money went, and how much of it was siphoned off as 'commissions'...

Yes its really hard to fight a drought. It takes new submarines, new tanks, new planes. Oh yes and new uniforms too

[Ricardo]

But hasn't Thailand been running a government spending-deficit for the past decade ?

http://www.tradingeconomics.com/thailand/government-budget

Making this a bit of a non-news story, and the political snipping off-target.

Ye sit has and good point too BUT the OTHER governments were mainly ELECTED and could borrow from the IMF and other sources.

This idiot can not borrow so it is going to be a major issue for him to deal with

Presumably the present government will continue to finance itself in future, just as it has while running a deficit for the past two years, no great new problem.

And the Chinese were willing to finance the rail-project, it was Thailand which (correctly IMO) geeked at the terms demanded, I imagine they would still love to gain further leverage with Thailand if there was a problem ?

Thailand remains a sovereign nation, with a legal (if military) government in place, I can't see any great difficulty in public-financing, provided they offer a couple-of-percent more interest.

[Snig27]

Waiting for the "but the rice scam was 700 billion baht" comments to roll in...

The figures given in the Economist six months into the coup for the losses to Thailand courtesy of the cabal dwarfed the rice 'scam'. Edited May 1, 2016 by Snig27

[rubl]

Waiting for the "but the rice scam was 700 billion baht" comments to roll in...

The figures given in the Economist six months into the coup for the losses to Thailand courtesy of the cabal dwarfed the rice 'scam'.

The previous government's concentration on someone's amnesty had long lasting effects indeed.

[sjaak327]

All that monitoring of social media apparently has a price. But 500 billion in only six months ? Seems they have 'lost' a bit of money here or there. What a bloody surprise.

[shirtless]

If they run their budget like most Thais the country is insolvent

[chiang mai]

It did ? I doubt it Rubl. Of course the current government didn't have to concentrate on passing an amnesty through both houses, they simply awarded one in their interim constitution.

The previous government's concentration on someone's amnesty had long lasting effects indeed.

Despite not having to concentrate on democratic matters, their financial performance seems to be much worse than Yingluck's government.

Isn't it ironic ? No democracy, abuse of human rights, and an appalling financial management, that makes the previous government look like a bunch of school children.

Can't they do anything right ?

Appalling Financial Management? Having a deficit is not good, but to call it appalling would condemn almost all countries in this world of ours. Even the Netherlands government just got below 3% deficit, and barely at that.

I hope you do realize that this is nowhere near 3%, it's over 33% !

Here you are condemming the rice scheme, that had a similar deficit over the course of three years (or actually more now), when this lot has taken 6 months to reach the same kind of deficit. Where is the condemnation now rubl ?

Thailands GDP is valued at USD 406 billion (that's Dollars), a deficit of THB 500 billion (in Baht) or 3.5% in round numbers.

[rubl]

It did ? I doubt it Rubl. Of course the current government didn't have to concentrate on passing an amnesty through both houses, they simply awarded one in their interim constitution.

The previous government's concentration on someone's amnesty had long lasting effects indeed.

Despite not having to concentrate on democratic matters, their financial performance seems to be much worse than Yingluck's government.

Isn't it ironic ? No democracy, abuse of human rights, and an appalling financial management, that makes the previous government look like a bunch of school children.

Can't they do anything right ?

Appalling Financial Management? Having a deficit is not good, but to call it appalling would condemn almost all countries in this world of ours. Even the Netherlands government just got below 3% deficit, and barely at that.

I hope you do realize that this is nowhere near 3%, it's over 33% !

Here you are condemming the rice scheme, that had a similar deficit over the course of three years (or actually more now), when this lot has taken 6 months to reach the same kind of deficit. Where is the condemnation now rubl ?

Thailands GDP is valued at USD 406 billion (that's Dollars), a deficit of THB 500 billion (in Baht) or 3.5% in round numbers.

From the FY2016 as published by the government:

"For FY 2016, the government has set the amount of 2,720,000 million baht

for the budget expenditures, equivalent to 19.3 per cent of the Gross Domestic

Product, to provide the government agencies, state enterprises and other agencies

with sufficient funds to mobilize the government’s policies and strategies in accordance

with the country’s current economic and social conditions. The net revenue has been

estimated at 2,333,000 million baht equivalent to 16.5 per cent of the GDP while

borrowings of 390,000 million baht, equivalent to 2.8 per cent of the GDP, will be

made to balance the deficit budget. The amount of deficit is still at the level which will

not affect the country’s fiscal discipline and position in the long term."

http://www.bb.go.th/budget_book/e-Book2559/FILEROOM/CABILIBRARY59/DRAWER01/GENERAL/DATA0000/inBrief2016.pdf

The economical situation hasn't stabilised / improved as forcasted and the deficit has increased accordingly. With Thailand depending for a large part on export and therefor the progress of the world economy no real surprise.

[sjaak327]

It did ? I doubt it Rubl. Of course the current government didn't have to concentrate on passing an amnesty through both houses, they simply awarded one in their interim constitution.

The previous government's concentration on someone's amnesty had long lasting effects indeed.

Despite not having to concentrate on democratic matters, their financial performance seems to be much worse than Yingluck's government.

Isn't it ironic ? No democracy, abuse of human rights, and an appalling financial management, that makes the previous government look like a bunch of school children.

Can't they do anything right ?

Appalling Financial Management? Having a deficit is not good, but to call it appalling would condemn almost all countries in this world of ours. Even the Netherlands government just got below 3% deficit, and barely at that.

I hope you do realize that this is nowhere near 3%, it's over 33% !

Here you are condemming the rice scheme, that had a similar deficit over the course of three years (or actually more now), when this lot has taken 6 months to reach the same kind of deficit. Where is the condemnation now rubl ?

Thailands GDP is valued at USD 406 billion (that's Dollars), a deficit of THB 500 billion (in Baht) or 3.5% in round numbers.

First, the deficit is for six months not a year. Second, they spend 1.57 trillion and collected 1.05 trillion baht, therefore the deficit is 1.57 - 1.05 = 0.52, 0.52/1.57 x 100 =33.12%

Now if measured against the GDP, which according to wikipedia is 397 billion, the deficit is still north of 7%.

Edited May 2, 2016 by sjaak327

[rubl]

Appalling Financial Management? Having a deficit is not good, but to call it appalling would condemn almost all countries in this world of ours. Even the Netherlands government just got below 3% deficit, and barely at that.

I hope you do realize that this is nowhere near 3%, it's over 33% !

Here you are condemming the rice scheme, that had a similar deficit over the course of three years (or actually more now), when this lot has taken 6 months to reach the same kind of deficit. Where is the condemnation now rubl ?

Thailands GDP is valued at USD 406 billion (that's Dollars), a deficit of THB 500 billion (in Baht) or 3.5% in round numbers.

First, the deficit is for six months not a year. Second, they spend 1.57 trillion and collected 1.05 trillion baht, therefore the deficit is 1.57 - 1.05 = 0.52, 0.52/1.57 x 100 =33.12%

That's what they call imaginative administration.

[chiang mai]

Appalling Financial Management? Having a deficit is not good, but to call it appalling would condemn almost all countries in this world of ours. Even the Netherlands government just got below 3% deficit, and barely at that.

I hope you do realize that this is nowhere near 3%, it's over 33% !

Here you are condemming the rice scheme, that had a similar deficit over the course of three years (or actually more now), when this lot has taken 6 months to reach the same kind of deficit. Where is the condemnation now rubl ?

Thailands GDP is valued at USD 406 billion (that's Dollars), a deficit of THB 500 billion (in Baht) or 3.5% in round numbers.

From the FY2016 as published by the government:

"For FY 2016, the government has set the amount of 2,720,000 million baht

for the budget expenditures, equivalent to 19.3 per cent of the Gross Domestic

Product, to provide the government agencies, state enterprises and other agencies

with sufficient funds to mobilize the government’s policies and strategies in accordance

with the country’s current economic and social conditions. The net revenue has been

estimated at 2,333,000 million baht equivalent to 16.5 per cent of the GDP while

borrowings of 390,000 million baht, equivalent to 2.8 per cent of the GDP, will be

made to balance the deficit budget. The amount of deficit is still at the level which will

not affect the country’s fiscal discipline and position in the long term."

http://www.bb.go.th/budget_book/e-Book2559/FILEROOM/CABILIBRARY59/DRAWER01/GENERAL/DATA0000/inBrief2016.pdf

The economical situation hasn't stabilised / improved as forcasted and the deficit has increased accordingly. With Thailand depending for a large part on export and therefor the progress of the world economy no real surprise.

I see, thanks for that link. They are valuing GDP at USD 376 billion with an expense budget equal to 19% of that amount, the 500 billion BAHT shortfall in receipts is still a very small amount for a deficit in comparison to other countries, especially for an exporting country in times of a global downturn. Definitely not a big deal.

[sjaak327]

Thailands GDP is valued at USD 406 billion (that's Dollars), a deficit of THB 500 billion (in Baht) or 3.5% in round numbers.

First, the deficit is for six months not a year. Second, they spend 1.57 trillion and collected 1.05 trillion baht, therefore the deficit is 1.57 - 1.05 = 0.52, 0.52/1.57 x 100 =33.12%

That's what they call imaginative administration.

no, the poster calculating a 6 months deficit against Thailand's GDP (which is based on 12 months) is doing a bit of creative book keeping. if correctly measured, they are looking at a deficit north of 7%, appalling is indeed the right word.

[chiang mai]

Appalling Financial Management? Having a deficit is not good, but to call it appalling would condemn almost all countries in this world of ours. Even the Netherlands government just got below 3% deficit, and barely at that.

I hope you do realize that this is nowhere near 3%, it's over 33% !

Here you are condemming the rice scheme, that had a similar deficit over the course of three years (or actually more now), when this lot has taken 6 months to reach the same kind of deficit. Where is the condemnation now rubl ?

Thailands GDP is valued at USD 406 billion (that's Dollars), a deficit of THB 500 billion (in Baht) or 3.5% in round numbers.

First, the deficit is for six months not a year. Second, they spend 1.57 trillion and collected 1.05 trillion baht, therefore the deficit is 1.57 - 1.05 = 0.52, 0.52/1.57 x 100 =33.12%

Now if measured against the GDP, which according to wikipedia is 397 billion, the deficit is still north of 7%.

But it's a deficit that is projected over the entire year, albeit reported at the six month mark, you can't annualize a six month ACTUAL loss and project the same rate of loss over the next six months also, if the deficit is turned around during the second half the actual twelve month deficit value could be negative. Ergo, the deficit is 3% unless you refer to it as a full tear projection, which they don't. BTW I used a rate of 35 for simplicity hence the value difference.

Edited May 2, 2016 by chiang mai

[sjaak327]

First, the deficit is for six months not a year. Second, they spend 1.57 trillion and collected 1.05 trillion baht, therefore the deficit is 1.57 - 1.05 = 0.52, 0.52/1.57 x 100 =33.12%

Now if measured against the GDP, which according to wikipedia is 397 billion, the deficit is still north of 7%.

But it's a deficit that is projected over the entire year, albeit reported at the six month mark, you can't annualize a six month ACTUAL loss and project the same rate of loss over the next six months also, if the deficit is turned around during the second half the actual twelve month deficit value could be negative. Ergo, the deficit is 3% unless you refer to it as a full tear projection, which they don't. BTW I used a rate of 35 for simplicity hence the value difference.

It is save to say that they probably won't be able to turn this around. They might end up at 6% but the 3.5% you mentioned is definitely out of reach when calculating the deficit over 12 months.

Did you see the projects they have planned ? i wouldn't be surprised if the deficit for the last 6 months will be more than the one they are now reporting.

[chiang mai]

First, the deficit is for six months not a year. Second, they spend 1.57 trillion and collected 1.05 trillion baht, therefore the deficit is 1.57 - 1.05 = 0.52, 0.52/1.57 x 100 =33.12%

Now if measured against the GDP, which according to wikipedia is 397 billion, the deficit is still north of 7%.

But it's a deficit that is projected over the entire year, albeit reported at the six month mark, you can't annualize a six month ACTUAL loss and project the same rate of loss over the next six months also, if the deficit is turned around during the second half the actual twelve month deficit value could be negative. Ergo, the deficit is 3% unless you refer to it as a full tear projection, which they don't. BTW I used a rate of 35 for simplicity hence the value difference.

It is save to say that they probably won't be able to turn this around. They might end up at 6% but the 3.5% you mentioned is definitely out of reach when calculating the deficit over 12 months.

Did you see the projects they have planned ? i wouldn't be surprised if the deficit for the last 6 months will be more than the one they are now reporting.

As long as we can agree that the deficit is 3.5% today we can worry about what it is in six months time, it's safe to say the deficit is NOT 33%.

[sjaak327]

First, the deficit is for six months not a year. Second, they spend 1.57 trillion and collected 1.05 trillion baht, therefore the deficit is 1.57 - 1.05 = 0.52, 0.52/1.57 x 100 =33.12%

Now if measured against the GDP, which according to wikipedia is 397 billion, the deficit is still north of 7%.

But it's a deficit that is projected over the entire year, albeit reported at the six month mark, you can't annualize a six month ACTUAL loss and project the same rate of loss over the next six months also, if the deficit is turned around during the second half the actual twelve month deficit value could be negative. Ergo, the deficit is 3% unless you refer to it as a full tear projection, which they don't. BTW I used a rate of 35 for simplicity hence the value difference.

It is save to say that they probably won't be able to turn this around. They might end up at 6% but the 3.5% you mentioned is definitely out of reach when calculating the deficit over 12 months.

Did you see the projects they have planned ? i wouldn't be surprised if the deficit for the last 6 months will be more than the one they are now reporting.

As long as we can agree that the deficit is 3.5% today we can worry about what it is in six months time, it's safe to say the deficit is NOT 33%.

It IS if measured against the expenditures. But I understand the need to paint a better picture.

[rubl]

But it's a deficit that is projected over the entire year, albeit reported at the six month mark, you can't annualize a six month ACTUAL loss and project the same rate of loss over the next six months also, if the deficit is turned around during the second half the actual twelve month deficit value could be negative. Ergo, the deficit is 3% unless you refer to it as a full tear projection, which they don't. BTW I used a rate of 35 for simplicity hence the value difference.

It is save to say that they probably won't be able to turn this around. They might end up at 6% but the 3.5% you mentioned is definitely out of reach when calculating the deficit over 12 months.

Did you see the projects they have planned ? i wouldn't be surprised if the deficit for the last 6 months will be more than the one they are now reporting.

As long as we can agree that the deficit is 3.5% today we can worry about what it is in six months time, it's safe to say the deficit is NOT 33%.

It IS if measured against the expenditures. But I understand the need to paint a better picture.

You seem to feel the need to suggest and tell us what you believe. Fortunately state finances are a bit more than your negative wishful thinking. But don't worry, I understand your need to paint a negative picture.

[metisdead]

Posts containing off topic obfuscation generalizations have been removed as well as the replies.

[sjaak327]

It IS if measured against the expenditures. But I understand the need to paint a better picture.

You seem to feel the need to suggest and tell us what you believe. Fortunately state finances are a bit more than your negative wishful thinking. But don't worry, I understand your need to paint a negative picture.

You can twist and turn all you want, a deficit of only 3% this isn't, end of story. The way they are going it's going to be over 7%, now if that would be the deficit of export country the Netherlands, heads are going to roll. But luckily over there the government does know a bit about keeping things in check.

Your precious Junta is currently employing "populist policies" but with the difference that they don't really have a legitimate mandate..

[rubl]

It IS if measured against the expenditures. But I understand the need to paint a better picture.

You seem to feel the need to suggest and tell us what you believe. Fortunately state finances are a bit more than your negative wishful thinking. But don't worry, I understand your need to paint a negative picture.

You can twist and turn all you want, a deficit of only 3% this isn't, end of story. The way they are going it's going to be over 7%, now if that would be the deficit of export country the Netherlands, heads are going to roll. But luckily over there the government does know a bit about keeping things in check.

Your precious Junta is currently employing "populist policies" but with the difference that they don't really have a legitimate mandate..

End of story is that you seem to have some interesting accounting methods, real imaginative and combined with your opinion charming.

The current government has provided more information on budgets than any previous government. Probably because previous governments didn't feel a need as voters could vote them out if 500 billion Baht squandered away was deemed too much.

As for the usual 'my junta', do you really feel a need to add that to try to imply that my reasoning is 'obviously' tainted and your reasoning is obviously the right and might of the democratic people who do not need to prove they're right?

[sjaak327]

It IS if measured against the expenditures. But I understand the need to paint a better picture.

You seem to feel the need to suggest and tell us what you believe. Fortunately state finances are a bit more than your negative wishful thinking. But don't worry, I understand your need to paint a negative picture.

You can twist and turn all you want, a deficit of only 3% this isn't, end of story. The way they are going it's going to be over 7%, now if that would be the deficit of export country the Netherlands, heads are going to roll. But luckily over there the government does know a bit about keeping things in check.

Your precious Junta is currently employing "populist policies" but with the difference that they don't really have a legitimate mandate..

End of story is that you seem to have some interesting accounting methods, real imaginative and combined with your opinion charming.

The current government has provided more information on budgets than any previous government. Probably because previous governments didn't feel a need as voters could vote them out if 500 billion Baht squandered away was deemed too much.

As for the usual 'my junta', do you really feel a need to add that to try to imply that my reasoning is 'obviously' tainted and your reasoning is obviously the right and might of the democratic people who do not need to prove they're right?

The answer to your last question is obviously YES. you seem to think that a deficit of over 500 billion in only 6 months is "ok'. I honestly believe you lost it now. They spend 1.57 trillion baht, and earned only 1.05. Again by the way things are going, their deficit will be well in excess of 7%. And that is definitely not OK.

Edited May 2, 2016 by sjaak327

[chiang mai]

But it's a deficit that is projected over the entire year, albeit reported at the six month mark, you can't annualize a six month ACTUAL loss and project the same rate of loss over the next six months also, if the deficit is turned around during the second half the actual twelve month deficit value could be negative. Ergo, the deficit is 3% unless you refer to it as a full tear projection, which they don't. BTW I used a rate of 35 for simplicity hence the value difference.

It is save to say that they probably won't be able to turn this around. They might end up at 6% but the 3.5% you mentioned is definitely out of reach when calculating the deficit over 12 months.

Did you see the projects they have planned ? i wouldn't be surprised if the deficit for the last 6 months will be more than the one they are now reporting.

As long as we can agree that the deficit is 3.5% today we can worry about what it is in six months time, it's safe to say the deficit is NOT 33%.

It IS if measured against the expenditures. But I understand the need to paint a better picture.

We are talking at cross purposes on this point to some degree: government budget deficits are nearly always expressed and reported as a percentage of GDP. True that the value of the deficit, the gap between income and expense is reported as a whole number (500 billion) but the percentage calculation and the headline reporting is always against the entire GDP. This is because, in part, the budget figure is typically only a smaller fraction of GDP, in the case of the subject, about 19% thus the formula is more meaningful than reporting expense against income as a percentage where the gap theoretically could result in a deficit that is over 100%. So it's not so much about any need to paint a better picture, it's more about conventions and reporting what people understand and being able to compare like for like.

If you look at the table in the following link you'll see deficits as a percentage of GDP and note that a 3.5% (half year) deficit is not at all unusual in any way.

http://www.oecd-ilibrary.org/economics/government-deficit_gov-dfct-table-en

The CIA list of global GDP deficits is more complete and portrays 3.5% in a very positive light, by comparison.

[https://www.cia.gov/library/publications/the-world-factbook/fields/2222.html

[rubl]

You seem to feel the need to suggest and tell us what you believe. Fortunately state finances are a bit more than your negative wishful thinking. But don't worry, I understand your need to paint a negative picture.

You can twist and turn all you want, a deficit of only 3% this isn't, end of story. The way they are going it's going to be over 7%, now if that would be the deficit of export country the Netherlands, heads are going to roll. But luckily over there the government does know a bit about keeping things in check.

Your precious Junta is currently employing "populist policies" but with the difference that they don't really have a legitimate mandate..

End of story is that you seem to have some interesting accounting methods, real imaginative and combined with your opinion charming.

The current government has provided more information on budgets than any previous government. Probably because previous governments didn't feel a need as voters could vote them out if 500 billion Baht squandered away was deemed too much.

As for the usual 'my junta', do you really feel a need to add that to try to imply that my reasoning is 'obviously' tainted and your reasoning is obviously the right and might of the democratic people who do not need to prove they're right?

The answer to your last question is obviously YES. you seem to think that a deficit of over 500 billion in only 6 months is "ok'. I honestly believe you lost it now. They spend 1.57 trillion baht, and earned only 1.05. Again by the way things are going, their deficit will be well in excess of 7%. And that is definitely not OK.

Interesting a simple exercise in accounting needs to be 'tainted' by politics to make matters more 'believable'.

BTW the OP has

"It said budget disbursements accounted for more than 1.5 trillion baht which is higher than for the same period last year as the government was eager to speed up injection of funds into critically needed economic stimulus packages."

Now we don't have further info so don't know how this 1.5 trillion relates to the FY16 budget and planned disbursements. Neither do we know that for the income side (the 1.05 trillion). As such the deficit may go either way, but at least you should be happy as it will not at all be near the 33% you complained about before.