FPO expects 3.7% growth
THE Fiscal Policy Office expects the economy to expand by 3.7 per cent this year provided no less than 70 per cent of the government's investment budget is disbursed and exports rise by 0.2 per cent, said Kulaya Tantitemit, director of the FPO's Macroecon
For this fiscal year, the state is budgeted to invest Bt56 billion in infrastructure mega-projects, but the FPO expects actual disbursement of about Bt45 billion. The office also forecasts disbursement of more than Bt25 billion of the Bt78.2-billion total budget for water resources and road projects.
In the first seven months of fiscal year 2015, the government disbursed about 58.4 per cent of the total expenditure budget of Bt2.575 trillion. Investment expenditure totalled Bt449 billion or 36.2 per cent of the budget for that purpose.
In April, collections of value-added tax (VAT) indicated that local consumption rose 12.8 per cent year on year. VAT collection on imported products contracted, however, by 10.9 per cent in the month. As a result, April’s VAT in total increased 2.5 per cent year on year. Seven-month VAT collections edged up 1.4 per cent, reflecting a consistent recovery of domestic consumption, according to the FPO.
Private investment continued its slowdown. April cement sales shrank 3.3 per cent year on year. Commercial-vehicle sales contracted 27 per cent from the same period of last year. However, collection of property tax increased 9.4 per cent. Imports of capital goods expanded 5.5 per cent.
The value of exports in April shrank 1.7 per cent year on year on drops in prices of agricultural products and declines in shipments of electrical appliances, compared with March’s 4.4-per-cent contraction. From the beginning of this year to April, exports contracted 4 per cent.
April imports shrank 6.8 per cent year on year, compared with the previous month’s 5.9-per-cent shrinkage.
In April, the number of foreign tourists increased 25.1 per cent year on year to 2.42 million. From the beginning of this year to April, the number soared 22.9 per cent. For the whole year, the government has set a target of 29.4 million foreign-tourist arrivals.
Kulaya said farm income was tending to fall continuously, which could affect domestic consumption. However, for fiscal 2015, the government has set aside 20 per cent of the total budget to raise farm incomes. About Bt110 billion is also set aside for agricultural-sector job creation and production efficiency.
On the economic-stability front, April unemployment stood at 0.9 per cent of the total workforce, or about 324,000 unemployed. The month’s headline inflation was minus-1.0 per cent and core inflation was 1 per cent. The country’s foreign reserves were US$161.1 billion, about 2.9 times the amount of external short-term debts.
