Academician The new government is expected to adjust the 2024 budget to support the welfare state by 200 billion baht, another 450 billion baht is missing.
Mr. Anusorn Tamajai, Former Director of Public Debt Management Policy and Supervisory Board The Ministry of Finance revealed that the new government is expected to adjust the 2024 budget to support the welfare state by only 200 billion baht, and at least 450 billion baht is missing if it wants to be fully allocated according to the welfare state campaign policy. It takes about 6.5 billion to reduce the emergency budget by at least half. Reduce the budget for the national defense category and the domestic peace category by another 30 percent to get another budget of approximately 106 billion baht, which is still insufficient according to the welfare state policy. Therefore, welfare should be gradually arranged in order of necessity in the following years. by avoiding incurring more debt or adding new taxes but focusing on collecting existing taxes to be more efficient improve the efficiency of state enterprises to be able to send more money to the state
If it is not possible to reduce the national defense category or the emergency central budget if you want to achieve the goal of caring for the public welfare according to the campaign. May use a method to expand the budget from 3.35 trillion baht to 3.45-3.8 trillion baht by increasing the budget deficit and creating debt to compensate. The ratio of public debt to GDP is still below the ceiling of 70 percent or increasing revenues and collecting taxes higher than the target set in the 2024 budget of at least 300 billion baht. tax base and definitely increase the tax rate or create more public debt Public debt, although still within the ceiling of the public debt to GDP ratio of 70 percent, may pose a risk of fiscal crisis in the future.
In addition, when governments increase public expenditures more than adequately, private investment spending may decline. due to rising real interest rates This increases the opportunity cost of borrowing money for private investment. Until causing a slowdown in overall investment through private investment in capital Social welfare and infrastructure can be reduced if there is a crowding-out effect from government borrowing to finance expenses. This may lead to obscuration of a better course of action. A gradual implementation and restructuring of budget spending in 2025-2027 is a better option.
After establishing a stable government foreign direct investment will increase significantly especially the relocation of investment bases from Chinese investors to Thailand and ASEAN The relocation of production bases out of the country by Chinese investors is a result of the trade conflict between China and the United States, with investment promotion applications expected in 2023 to reach 100 billion baht from the first quarter of this year. There is an investment of 25,000 million baht, an increase of 80 percent compared to the same period last year.
Mr. Anusorn Tamajai added A new post-election government will face increasing fiscal pressure and fiscal burden. In addition, delays in forming a government due to constitutional restrictions and refusal to accept the election results of the losers will delay preparation of the 2024 budget. for at least 3-4 months, now the total outstanding public debt is 10.72 trillion baht, representing 61.13 percent of GDP, while the Federal Reserve temporarily stopped raising interest rates that the upward direction of interest rates was almost over, with put pressure on the business sector The investment sector slowed down. Long-Term Bonds Are More Attractive The US dollar was slightly weaker in the short term. It is expected that the direction of world oil prices will not pressure inflation much more because OPEC’s oil production cuts will not increase world crude oil prices much. from increased energy production and supply in the United States can be offset.-Thai News Agency
Source: Thai News Agency