The Thailand Development Research Institute (TDRI) urged the government to reduce the country’s public debt, especially due to the annual Bt200 billion loss incurred from the highly-criticized rice pledging scheme which is set to drag on to 2017.
Somchai Jitsuchon, a leading TDRI economist, said today that investment in infrastructure in preparation for the ASEAN Economic Community, water management projects and the new corporate tax structure are some of the factors contributing to escalating public debts in 2013-2017.
He forecasts that Thailand’s economy this year will grow at least 5 per cent with inflation at 2.8 per cent, while export will be slightly higher than last year at 4.2 per cent.
The government should control public spending and adjust some projects he described as being exorbitant while increasing certain taxes such as the land tax, construction tax and value added tax.
Debt per capita will exceed 60 per cent if Thailand’s annual economic growth is lower than 6 per cent, the TDRI economist said, indicating that successful spending control will result in public debt control.
Somkiat Tangkitvanich, TDRI president, said the Bt300 daily minimum wage has boosted workers’ income, but negatively impacted some small-sized businesses in several industries.
The TDRI proposed that the government announce 2013-2022 as a decade of productivity growth for Thailand’s businesses by boosting labour skills, investment in research and development and launching education reform. (MCOT online news)
Concerned about a rising level of public debt, former finance ministers have urged the government to focus on fiscal discipline and stop its populist policies.
At a seminar on “Challenge for the Future of the Thai Economy in 2013” held by the Economic Reporters Association yesterday, former finance minister MR Pridiyathorn Devakula said two challenges were how to grow the Thai economy and how to keep the economy stable. To achieve both of these, the government has to pay more attention to the public debt.
Pridiyathorn said the current government was less concerned about fiscal discipline than populist policies to ensure voter support, and that could result in damage to the nation’s finances.
Before introduction of the rice-pledging programme, the public debt stood at Bt8.6 trillion (S$355 billion). If the scheme is continued, the debt could reach Bt10.3 trillion, or 63.7 per cent of gross domestic product, by the end of September 2019, he predicted.