FPO finds reasons to hope for decent growth
Play
THINGS are not that bleak, as the government's mega-projects are already showing tangible progress, the Fiscal Policy Office said yesterday.
“Capital from the government’s investment in mega-projects will definitely enter the economic system in the second half of this year after a delay in the first half,” said Krisda Chinavicharana, director-general of the FPO.
He was referring to the Transport Ministry’s Bt3 trillion worth of infrastructure development projects, excluding high-speed railways, for 2015-22.
Private consumption and investment along with merchandise exports and the agriculture sector were all down in May, but tourism is doing well. The fortune from inbound tourists is expected to continue flowing in during the remaining quarters.
“Government spending on mega-projects is coming along, exports are not that bad compared with neighbouring countries, the collection of value-added tax that is based on domestic consumption is still expanding, and the tourism industry is going to continue to be the hero this year.
“So the economy will be able to expand by more than 3 per cent this year, but by how much more is the subject that will continue to be monitored,” he said.
The FPO’s projection for expansion of gross domestic product in 2015 is 3.7 per cent, but the forecast is expected to be revised in July. The Bank of Thailand downgraded its forecast from 3.8 per cent to 3.0 per cent on May 19.
Krisda said about Bt9 billion has been disbursed for the government’s infrastructure mega-projects since the beginning of the year. Half of the contracts for the government’s Bt40 billion worth of road and water-management projects have been signed and some Bt10 billion of that is expected to enter the economy in the second half of the year.
“If around Bt20 billion worth of contracts have already been signed, I believe that it will progress,” he said.
In May, VAT revenue from domestic consumption surged 11.6 per cent from the previous year, but value-added tax from imports shrank by 19.4 per cent, resulting in a net contraction of 2.5 per cent. VAT revenue in the year to May 29 has edged up by 0.6 per cent.
Tourism revenue
Tourism revenue soared 38.2 per cent last month from 2.31 million arrivals, and this business was still gaining momentum this month. The growth in May was the fastest this year.
The country has welcomed 12.45 million people since the beginning of the year and the government expects 28.8 million to come by the time the year is over.
The government managed to disburse Bt164 billion last month, up 15.1 per cent from the same period last year. Of that, Bt139.5 billion was for fixed expenses, up 10.9 per cent, and Bt24.4 billion for investment, up 47.2 per cent.
The government has disbursed Bt1.83 trillion of its Bt2.575-trillion fiscal budget, of which Bt449 billion was set aside for investment.
