Expenditure budget to run smaller deficit

The government’s annual expenditure budget will run a deficit at the same amount as this fiscal year or smaller for fiscal 2018 to maintain fiscal discipline and as the economy is expected to improve, says the head of the Budget Bureau.

The next fiscal year’s budget, which is being processed by the bureau, will continue to run in deficit in order to stimulate the economy amid global uncertainties, director-general Somsak Chotratanasiri said. But it will not exceed this year’s 390 billion baht deficit, he added.

The government ran a budget deficit of 250 billion baht for fiscal 2015, unchanged from the previous year, before widening the budget deficit to 390 billion for fiscal 2016. It is maintaining a budget deficit of 390 billion baht for fiscal 2017.

The Fiscal Policy Office (FPO) said in 2016 it planned a balanced budget for the next eight years, delayed from fiscal 2017, after running a deficit for almost 20 years. The Finance Ministry’s think tank cited liabilities from hefty spending on infrastructure development and losses from the Yingluck Shinawatra government’s rice pledging scheme for running budget deficits for an extended time.

With its optimistic view that the economy will improve and is likely to reach its full potential of 4-5% this year, the taxcollecting agencies are expected to be able to garner higher income, said Mr Somsak.

However, the size of the budget deficit will depend on a meeting of the Finance Ministry, the Budget Bureau, the National Economic and Social Development Board and the Bank of Thailand on Jan 12.

The FPO forecast that the economy will come in at 3.4% this year and it could hit 4% if the private sector revs up investment.

Mr Somsak said the 2018 budget planning will largely be based on economic growth to cushion against the stuttering global economy.