BANGKOK: Thailand’s parliament began debate on Wednesday on a budget bill that projects a larger 623 billion baht (RM86.3 bil) deficit for the 2021 fiscal year starting Oct 1 as the government tries to revive an economy hit badly by the coronavirus.
Southeast Asia’s second-largest economy could shrink a record 8.1% this year, the central bank predicts. The budget planners expect a contraction of 5%-6%.
“The Thai economy remains highly uncertain and may perform worse than forecast if the Covid-19 outbreak continues,” Prime Minister Prayuth Chan-ocha told the House of Representatives, which plans to debate until Friday.
The 623 billion baht deficit, accounting for 3.7% of GDP, is up from the 523 billion baht planned in January, and 32.8% higher than the previous fiscal year.
The government expected revenue to fall by 100 billion baht in the next fiscal year. The budget gap was increased by the same amount in late March, when Thailand imposed restrictions to curb the outbreak, Budget Bureau chief Dechapiwat Na Songkhla said.
The bill still projects spending of 3.3 trillion baht, up 3.1% from the previous year.
The budget plans for government investment of about 675 billion baht, up 4.7% from the previous year, and slightly lower than the 693 billion baht estimated in January.
The bill’s second and third readings are expected in early September, Dechapiwat said. It will also need senate and royal approval.
The budget planners have assumed the economy will grow 4%-5% in 2021. – July 1, 2020, Reuters
