Deficits could hit Bt500 bn in FY 2013
Play
The government's budget deficit for fiscal 2011 rose sharply and is expected grow further in the next few years because of populist policies and the lingering impacts of this year's flood disaster, reaching about Bt500 billion in fiscal 2013.
“The government ran a large fiscal deficit of Bt207.57 billion for the 2011 fiscal year, up sharply from the deficit of Bt52.73 billion in the previous fiscal,” Somchai Sujjapongse, director-general of the Fiscal Policy Office, said yesterday.
The deficit was fuelled by the government’s policy to spend more to boost the economy, he said.
Revenue totalled Bt2.82 trillion, or 26.5 per cent of gross domestic product. That was 8.5 per cent higher than in the previous year. Meanwhile, spending rose to Bt3.03 trillion, up 14.3 per cent year on year.
The deficit was not surprising give the government’s efforts to boost the economy, Somchai said.
However, it had a budget surplus in the final quarter of the 2011 fiscal year (July to September) of Bt42.5 billion, compared with a surplus of Bt63.7 billion in the same quarter of the previous fiscal. Revenue in the quarter was Bt749.06 billion against spending of Bt707.01 billion.
The government plans to run a deficit of Bt400 billion for fiscal 2012. A source at the Finance Ministry said the administration might opt to widen the deficit to Bt500 billion for fiscal 2013, which starts in October. This would be due to the investment needed to prevent or mitigate future flooding.
Public debt is expected to peak in 2013. Currently it is about Bt4 trillion, equivalent to 40 per cent of GDP.
Rising public debt could rock investor confidence in the Thai economy and lead to rising of cost of borrowing for the government, financial institutions and private firms.
