By The Nation
Virabongsa Ramankura, a former finance minister and noted economist, is urging the government to spend more as the economy slows down due to a trade war between the world’s two largest economies – the US and China.
Virabongsa, who was also formerly a deputy prime minister, said the government should not worry about the country being hit by a debt crisis like in 1997, adding that the public debt is only 42 per cent of the gross domestic product (GDP), which is quite low.
He said the government could borrow more money or push the debt up to 70 per cent of the GDP. The economist also said it was a pity that the government has not been using its financial resources effectively to boost growth.
The government could also unlock high liquidity in the financial system to benefit investments, he said, adding that regulations restraining the disbursement of funds to promote public investments should also be relaxed.
He also put the slowdown to public infrastructure projects that are stalled, adding that the government has not been taking advantage of the fact that the country has a high current-account surplus.
“This is a weak point of the military government, which deploys state officials for work. This is in contradiction to an elected government, which is usually under high pressure to deliver outcomes,” he said.
However, he said, he agreed with the government’s project of giving cash to farmers.
He said Thailand could not avoid the impact from the trade war as exports account for 75 per cent of the GDP. Thai exports have contracted due to a slowdown in the global economy and the strengthening baht is also worsening matters for the export sector, he said.