Indicators show govt liquidity shortfall unlikely, FPO says
The government is not expected to face a lack of liquidity, given the large amount of treasury reserves and the option of raising funds in the capital markets despite its cash deficit of Bt454.08 billion for the first four months of the 2013 fiscal year, according to the Fiscal Policy Office (FPO).
The cash deficit consisted of the Bt319.50-billion budget deficit and an off-budget deficit of Bt134.58 billion.
The cash-flow deficit after the Bt117.82 billion in borrowing was Bt336.26 billion.
Somchai Sujjapongse, director-general of the FPO, said the cash deficit would not lead to liquidity problems given the Bt224.08 billion in treasury reserves as of the end of last month.
Besides, the markets are ready to extend borrowings, judging from the overwhelming responses to the previous auctions of government bonds.
In the first four months of the 2013 fiscal year starting October 1, 2012, government revenue totalled Bt674.53 billion, up 24.3 per cent or Bt131.98 billion from the same period of the previous fiscal year. Higher income from value-added tax and excise tax for cars were cited for the extra revenue as a result of the first-car programme.
In the same period, budget disbursement jumped 55.2 per cent to Bt994.03 billion because of the delay in expenditure enforcement planned for the previous fiscal year as well as the government's economic stimulus.
Somchai said the government had accelerated budget disbursement at rate higher than its target and the rise in revenue collection, resulting from the country's economic expansion after the fiscal stimulus.
He also expressed confidence on the government's policy implementation under a robust fiscal stance in 2013.
Praipol Koomsup, former Thammasat University economics lecturer, said in a radio interview yesterday that the government should speed up infrastructure spending to ensure substantial growth. The government has allotted Bt2.2 trillion for overall infrastructure development.
He noted an improvement in gross domestic product, which registered growth of 6.4 last year. The government has also spent heavily to boost economic growth. However, it remains to be seen whether the growth will be substantial, he said.
With the country's public debt at 40 per cent of GDP, the government should try to reduce the deficit and strive for a balanced budget, he said.