The Thai government experienced a major deficit of more than Bt150 billion in cash balance in the first four months of Fiscal 2008 as a result of accelerated state spending on investment, according to the Fiscal Policy Office.
FPO spokesman Somchai Sajjapong revealed that the government’s cash status in January was in deficit for the fourth consecutive month by Bt34.62 billion.
Overall, in the first four months of Fiscal 2008, the government had experienced a deficit of Bt150.27 billion, up 185 per cent from the same period of the previous fiscal year, he said.
Of this, Bt121.39 billion is a budget deficit and Bt28.88 billion is an off-budget deficit. (TNA)
The Junta has previously decided to increase the public deficit (to 165 billions for the current fiscal year) in order to boost the ailing growth.
It’s important to note that the new (elected) government has nothing to do with the first four months of the fiscal year (that started in october 2007).
Keep that in mind when you read that the new government wants to add 110 billions of new expenses (read here)…
Anyway. The bottom line is : the deficit on the first 4 months has exploded.
Furthermore, the datas for january have not been published yet on the FPO’s website (nor the BOT).
Anyway to make it simple, here are the FPO’s figures, based on the “fiscal balance” (the one I think the spokesman was speaking about), that gives a broader view on the cash position of the government.
Last point, here is an excerpt of the Monthly Economic Report (December and Q4 of 2007) from FPO :
1. Fiscal indicators showed that government’s budget disbursement in December and 4th quarter of 2007 played a vital role in supporting the Thai economy. In December and 4th quarter of 2007, total budget disbursement amounted to 110.9 billion baht and 393.3 billion baht, respectively, or grew at 11.8 percent (y-o-y) and 31.1 percent (y-o-y), respectively.
In particular, capital expenditure disbursement in the 4th quarter of 2007 expanded substantially at 176.4 percent (y-o-y). These high growth figures reflected crucial role of expansionary fiscal policy in supporting domestic economy at the time when private sector spending has not yet fully recovered, and partly due to the low-based effect from low budget disbursement during the same period last year as a result of delayed FY2007 budget approval.
Will it be enough to boost the GDP ?