Thailand’s lower house has finally passed the delayed 3.48 trillion-baht budget bill for the fiscal year 2024.
Key takeaways
- The Thai government explained that the budget will be ready to be used early next month.
- The main focus of the new budget will be to help increase the level of consumption in the Thai economy.
- The state planning agency has adjusted its growth outlook for 2024 to between 2.2% and 3.2%
The new budget will focus on increasing spending in the Thai economy and a drop of 0.3% in the budget deficit to 693 billion baht from the previous year.
The approved bill will play a key role in trying to help recover the second-largest economy in the Southeast Asia region.
The Thai government explained that the budget will be ready to be used early next month, being a couple of months delayed from its original date set on Oct 1, 2023, due to a prolonged political gridlock following a May election. The current government was formed in August.
The delay in the budget has had a tangible impact on government spending and, consequently, on the economy, which contracted unexpectedly in the last quarter of 2023. The full-year growth stood at 1.9%, slower than anticipated and below the 2.5% growth in 2022.
The state planning agency has adjusted its growth outlook for 2024 to between 2.2% and 3.2%, down from the previously projected 2.7%-3.7%. This revision reflects the urgency of the need for economic stimulus measures and interest rate cuts from a decade-high of 2.5%, a point of contention between the Prime Minister and the central bank.
Of the total budget, approximately 718 billion baht is allocated for investment, signaling the government’s commitment to bolstering the economy through strategic development projects. The budget was supported by 298 lawmakers, with 166 opposing it, indicating a strong but not unanimous consensus on the path forward for Thailand’s economic recovery.
Prime Minister Srettha Thavisin has emphasized that the budget will be used to support the economy, society, and the people’s living standards. He remains steadfast in delivering on his signature election campaign promise of a controversial 500 billion baht handout scheme to help boost growth. However, this scheme, which involves distributing 10,000 baht to 50 million Thais to spend within six months, has been met with skepticism. Concerns have been raised about its funding, with some experts labeling it inflationary and fiscally irresponsible.
The budget bill is currently awaiting approval from the Senate and royal before it can take effect. The government aims to have the budget ready for use by early next month, with the goal of providing much-needed stimulus to the Thai economy. As Thailand navigates through these challenging economic times, the approval of the delayed budget is a critical step toward revitalizing the nation’s economic prospects and ensuring a more stable and prosperous future for its citizens.
