Prayuth predicts economic recovery to follow political clarity and the fiscal budget
August 18, 2014 18:04 By The Nation
THE FISCAL 2015 budget of Bt2.575 trillion will adhere to the clear and proper principles of "economic sufficiency", said the National Council for Peace and Order (NCPO)'s head General Prayuth Chan-ocha.
He expects the economy to recover in the latter half of this year on the back of a clearer political situation and the effectiveness of this fiscal year’s budget act.
The National Legislative Assembly’s meeting on Monday was chaired by Pornpetch Wichitcholchai and the national budget of no more than Bt2.575 trillion for fiscal 2015 was reviewed.
According to Prayuth, this year’s budget was set to be in deficit, adhering to the principles of economic sufficiency.
The budget act for the fiscal 2015, with continuity of all ministries and departments’ plans and projects, had conformed to the 11th national economic and social development plan, 2012-2016, and the budget spending was required to follow fiscal and monetary disciplines.
Prayuth said in his view the national strategy was required to concentrate on both agriculture and manufacturing. Quarterly reports of budget spending should be submitted.
Of total budget, Bt2.53 trillion would be used as expenditure for state enterprises and other state agencies, and about Bt41.97 billion repaid for treasury balance.
In 2014, the Thai economic growth is forecast at 1.5-2.5 per cent, which could be driven by domestic demand in the latter half of this year on the back of a clearer political situation and the effectiveness of this fiscal year’s budget act. Inflation for the year is estimated at 1.9-2.9 per cent.
The national budget has been employed from the start of the year, and there has been more confidence, spending and private investment, which have prompted improvement of domestic demand to drive the Thai economy, Prayuth said.
Next year is expected to see growth at 3.5-4.5 per cent in light of an expected global economic recovery and improvement of global trade. Thailand is expected to see export expansion, while its domestic demand could continue to improve. Inflation is projected at 1.8-2.8 per cent in 2015.
The country’s current account is expected to face a surplus after likely export improvement and tourism recovery. Thailand’s net revenue collection is estimated at Bt2.43 trillion, up 2.1 per cent year-on-year, for the fiscal year 2015.
After tax allocation of Bt109 billion to local administrative organisations, net revenue for the government’s expenditure is expected at Bt2.325 trillion or 17.6 per cent of the nation’s gross domestic product (GDP). This fiscal year’s budget for expenditure is set at Bt2.575 trillion.
Now, the treasury balance totals Bt333.43 billion.
Prayuth said this year’s budget extended from the celebration of Her Royal Highness Princess Maha Chakri Sirindhorn’s fifth cycle birthday anniversary, solutions to and improvement in the southernmost provinces, implementation under the Asean Economic Community (AEC), prevention and suppression of corruption, to human resources development.
The national budget expenditure will fully cover all financial sources, including budget, off-budget and borrowings. Reviews will be taken of the necessity for projects and operations. Set aside for the Ministry of Education is 19.5 per cent of this year’s budget, the highest allocation.
Efficiency would also be enhanced in budget spending this year, Prayuth said, adding budget for investment was set at Bt450.16 billion. This would be made for land and construction for both the central to the regional.
Strategic budget allocation extends from Bt955.92 billion for education, health care, virtue and merits, quality of life, Bt222.76 billion for the state security, Bt186.24 billion for increase of confidence and acceleration of the nation’s sound foundation, Bt169.11 billion for the economic growth with sustainability, Bt135.12 billion for national resource allocation and environment.
Some Bt24.74 billion is set for scientific, technological development, research and innovation, Bt9.59 billion for foreign and international affairs, Bt354.48 billion for the nation’s good administration and Bt517.02 billion for state operations.
Prayuth insisted this fiscal year’s expenditure budget allocation was based on clear and proper principles with transparency and worthiness. Close monitoring would be made with all state agencies’ quarterly spending reports.
He said construction costs must be 10-30 per cent lower without kickbacks.