Deputy Finance Minister Sommai Phasee said yesterday that Deputy Prime Minister and Finance Minister MR Pridiyathorn Devakula would decide how much the deficit for the 2008 fiscal year would be.

Earlier, Pridiyathorn had clearly stated that the government would like to use both monetary and fiscal policy to stimulate the economy, which is in a slowdown due mainly to falling domestic demand.

Sommai added that the 2008 fiscal deficit would not boost public debt above the ceiling of 50 per cent of gross domestic product.

However, the deputy finance minister said the details of how to allocate the 2008 budget had yet to be concluded, although the ministry, the Fiscal Policy Office, the Bank of Thailand and the National Economic and Social Development Board had discussed the issue on Thursday.

"The 2008 budget is likely to be in deficit, and the amount of deficit should be equal to this year's. The Fiscal Policy Office is calculating government income for consideration. The revenues will not be high as the economy has not grown as much as in the past," Sommai said.

He added that the revenues for fiscal 2008 would not meet expenses and the inflation rate would remain low, so that there was a need to stimulate the economy.

Thailand's fiscal 2007 budget is at Bt1.57 trillion, with a deficit of Bt146 billion.

Pridiyathorn said yesterday that the real GDP of 5 per cent with an inflation rate of 3 per cent forecast for 2008 would result in a nominal GDP of 8 per cent on which to calculate the government's budget for next fiscal year.

Over the first four months of fiscal 2007, the government has generated Bt404 billion in income, 1 per cent higher than the target, and 11 per cent higher than in the same period last year. Disbursement for the first four months was recorded at Bt344 billion, or 22 per cent of total budget.