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Published on January 28, 2008

Finance Ministry officials are worrying about an economic slowdown, which would hit common people hard.

They fear that a threatening recession in the United States from the stubborn sub-prime loan disease could infect the economy here.

The source said the new government could pump more money into the market by continuing to run a budget deficit until fiscal year 2012, or for four years.

The interim government pencilled in a deficit of Bt165 billion for the current fiscal year ending in September. The deficit would be equivalent to 1.84 per cent of gross domestic product (GDP).

The new government might want to reduce the deficit to Bt152.2 billion for the 2009 fiscal year, then to Bt137 billion in the following year, before narrowing it down further to Bt119.9 billion in 2011 and Bt99.2 billion in 2012, he said.

However, if the government wants to keep the economy humming it could raise the deficit up to 2.5 per cent of GDP in this period.

GDP would expand 4.5 per cent annually during this period from Bt8.4 trillion currently, while the inflation rate is expected to be about 3.5 per cent.

The Finance Ministry has prepared to offer government bonds with maturities of five, 10, 15 and 20 years.

Of the total planned issuance, 3 per cent would be savings bonds for sale to retail investors.

Wichit Chaitrong

The Nation