FRIDAY, March 29, 2024
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Economy grows at slower rate of 3.2% in Q3 as public debt rises

Economy grows at slower rate of 3.2% in Q3 as public debt rises

THE THAI economy recorded a slower growth rate of 3.2 per cent in the third quarter as the country’s outstanding public debt increased slightly amid a large drop in treasury reserves due to revenue shortfalls and higher public expenses.

Gross domestic product growth was 3.5 per cent in the second quarter and for the first nine months of this year, growth averaged 3.3 per cent, while next year’s economic |outlook will heavily depend on US president-elect Donald Trump’s |economic and other policies as well as on the country’s agriculture prices and tourism sector.
Domestic paddy prices have dropped to a 10-year low while the tourism industry is facing a negative impact from a government crackdown on illegal Chinese tour operators in Thailand, resulting in a sharp drop in tourist arrivals from China.
Over the past several years, China has been the biggest source of foreign tourists in Thailand, accounting for almost a third of the 30 million tourist arrivals to the Kingdom last year.
According to the Public Debt Management Office, Thailand’s outstanding public debt as of September 30 increased slightly from the month before to Bt5.98 trillion, representing 42.73 per cent of GDP.
In August, the public debt was at Bt5.95 billion, or 42.64 per cent of GDP. 
Of the total amount, Bt5.64 trillion was domestic debt, representing 94.21 per cent of the total public debt, and Bt346.43 billion was external debt, accounting for 5.79 per cent of the total.

Treasury reserves fall 
Compared with the previous month, public debt increased by Bt39.05 billion in the latest count.
The country’s treasury reserves, however, dropped significantly to only Bt235 billion in October due to revenue shortfalls and higher expenses.
According to Kritsada Jinavijarana, director-general of the Fiscal Policy Office, budget disbursements totalled Bt435 billion in October while the government’s revenues amounted to Bt154 billion. The government also borrowed Bt52.7 billion in October.
As a result, the country’s treasury reserves fell to Bt235 billion in October from the previous month’s Bt441.3 billion.
The October revenue shortfall was attributed to less import tax collections, which was down 1.2 per cent from the previous month. 
However, budget disbursements jumped 16.3 per cent to a total of Bt435 billion.
Of the total amount, Bt62.5 billion was disbursed to local government organisations; Bt54 billion to the Bank for Agriculture and Agricultural Cooperatives (BAAC), the previous rice-pledging and other schemes; and Bt45.4 billion for Education Ministry subsidies.
Earlier, the Finance Ministry reported that the government had set aside a budget of more than Bt50 billion to pay for the BAAC’s previous rice-pledging scheme.
During the tenure of former PM Yingluck Shinawatra, the BAAC provided a Bt100-billion loan to the state and issued bonds worth Bt400 |billion to finance the unlimited rice-pledging scheme, which resulted in a massive losses to the state.
The Prayut government |earmarked a budget of nearly Bt60 billion to aid rice farmers hit hard by record low paddy prices.

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