Finance Minister Kittiratt Na-Ranong admitted yesterday that sometimes he had to exaggerate about the country’s economic growth, even though the government has been fully aware since early this year that the global economic slowdown would likely swamp Thailand.
“But [the government] must aim high in order to create confidence,” Kittiratt, who is also a deputy prime minister, said.
“The finance minister needs to lie sometimes to create good feelings. The world knows this as a ‘white lie’. The goal is to create confidence, which in turn benefits the country’s economy as a whole,” he said.
He added that he was not surprised when the National Economic and Social Development Board (NESDB), the state planning agency, revised its forecast for export growth down to a mere 7.3 per cent this year due to the slumping global economy.
The NESDB downgraded export growth but maintained gross domestic product (GDP) growth at 5.5 to 6 per cent, which is close to the government’s projection, he said.
In the past, export expansion at only 7.3 per cent would not be enough for GDP growth to reach 5 per cent, he said.
The latest development of lower exports, but higher GDP, suggests that the economy has become more balanced to some extent, he said.
He was upbeat about the second half of the year, saying the economy will expand as planned by the government.
He added that the government would try very hard to boost exports and accelerate public spending.
In order to boost the domestic economy, government agencies have been asked by the Comptroller-General’s Department to accelerate disbursement of the Bt2.4-trillion budget for fiscal 2013, as the government wants to depend less on exports.
“State agencies are asked to proceed with procurement procedure right now for projects that will start between October and December, so budget disbursement could be done quickly when the Budget Bill takes effect,” he said at a seminar hosted by the Thansettakij newspaper.
The early procurement process will resolve the 28-per-cent delay in capital spending in the current fiscal year, he said. Also, accelerating public investment would be a boon to the economy, he said.
“Efficient public spending, coupled with consumer and tourist spending will help Thailand have more balanced growth in the future, then exports will not grow more than 10 per cent as in the past,” Kittiratt said.
He viewed these factors as an advantage for the Thai economy as it will be able to limit its dependency on exports for economic growth.
Kittiratt went on to say that the Thai economy, after the 1997 Asian financial crisis, had experienced a deficit of trade in goods and services and had to depend on exports for about 15 years.
Hence, the current government sees an urgent need for the country to depend less on exports and rely more on domestic demand. However, he admitted that the Kingdom still faced the problem of budget disbursement and that domestic consumption was not strong enough.
In addition, corruption in both public and private sectors is endemic, he said.
These problems have in the past forced Thai firms to seek investment overseas if they want to expand their businesses, he said.
However, in the first half of this year, domestic private investment expanded more than 10 per cent, which is a good sign, he said.