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Thailand plans larger deficit from outbreak as budget debate starts

Thailand plans larger deficit from outbreak as budget debate starts

FILE PHOTO: Thailand's Prime Minister Prayuth Chan-ocha arrives before a family photo session with new cabinet ministers at the Government House in Bangkok, Thailand, March 30, 2021. REUTERS/Athit Perawongmetha/File Photo

BANGKOK: Thailand's parliament started debate on Monday on a budget bill that projects a bigger 700 billion baht (US$22.41 billion) deficit for the 2022 fiscal year starting Oct. 1, as the government attempts to revive an economy hit by coronavirus outbreaks.

The country's latest, most severe outbreak has accounted for more than 80per cent of its total infections and 90per cent of deaths and it has yet to start mass COVID-19 vaccinations.

Southeast Asia's second-largest economy may grow 1.5per cent-2.5per cent this year, the state planning agency forecast earlier this month. The budget plan sees growth of 2.5per cent-3.5per cent.

"There are limitations and risks that could affect Thailand's economic recovery in 2021," Prime Minister Prayuth Chan-ocha told the House of Representatives, which plans to debate the first reading until Wednesday.

"There remains uncertainty over the situation of COVID-19 outbreaks at home and overseas that may be more severe and continue longer than expected," he said.

The 700 billion baht deficit is up from the 609 billion baht deficit for the current fiscal year.

The budget projects spending of 3.1 trillion baht (US$99.23 billion), down about 5.7per cent this year. The gap comes from lower tax revenue, expected at of 2.4 trillion baht.

Opposition leader Sompong Amornvivat said the budget bill did not adequately address the coronavirus crisis.

"People are suffering from COVID-19 ... but I don't see any clear plans or strategies on how to handle that," he said.

The bill's second and third readings are expected in August.

The budget planners have assumed the economy will grow 4.0-5.0per cent in 2022.

(US$1 = 31.24 baht)

(Reporting by Panarat Thepgumpanat and Orathai Sriring; Editing by Martin Petty)

Source: Reuters

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