Finance Minister : “Govt has money to pay salaries”… really ?

Finance Minister Korn Chatikavanij Saturday insisted that the government will have enough cash to pay salaries of government officials and finance on-going projects although the treasury reserve dropped to Bt52 billion.

He said the Finance Ministry has several tools for cash management so the government would not become cash-strapped.

The permanent secretary for Finance Ministry disclosed on Friday that the treasury reserve dropped to Bt52 billion at the end of December.

Korn said the government would receive huge amounts of cashes from taxes in May. (Nation)

You know already that taxes revenues are going down (read my article).

Now… what about the gvt’s employees wages ?

Point your browser on the NESDB (the agency that calculates GDP figures for Thailand). And download the Excel file.

gvtpay1

As for the “huge amount of cash” scheduled for may… Yes, it’s corporate taxes (may and september).

But Korn is a clown because he relies on a ressources that is going down, and will continue to do so… Businesses will make less and less profits.

As for the other ressources, they are decreasing too (personal income taxes, VAT, etc. Read my article).

The thai government is running a budget deficit since several years. The Junta, Samak, Somchai and now Abhisit… they have all added some “extra budget”… spreading money around them like Santa Claus.

State coffers are empty.

And it’s going to get worse.

The best proof : they want to borrow money… abroad (read here).

7 Responses to “Finance Minister : “Govt has money to pay salaries”… really ?”


  1. 1 James 1 February 2009 at 6:55 am

    Ok, besides a lot of people and governments going broke this year, here are some of my predictions for 2009, please post some of yours!

    1. Violent protests will erupt in Bangkok – further destabilizing the nation

    2. Record defaults on bank mortgages in Asia will make the front pages of Bangkok post and Thailand Crisis

    3. Government officials and corporate execs all over the world will remain in denial in hopes of galvanizing the consumer spirits rather than the animal spirits

    4. Senior citizens in the U.S. and Western Europe will experience sudden and explosive housing troubles as they scramble to maintain their lifestyles on their pathetic pensions and social security

    5. Consumers will become an endangered species — all over the world

    6. Trust in paper/securities/bankers/funds/stocks will evaporate

    7. Gold and silver will double

    8. A major international crisis will spark a war which will put people to work

    9. Britain will secretly borrow hundreds of billions to prevent defaulting on their debt

    10. Direct democracy will reinstate a previous “person” who will then attempt to take revenge through harsh legal actions against alleged culprits

  2. 2 ThaiCrisis 1 February 2009 at 7:18 am

    Overall, I share your views. But it’s an extreme scenario.
    I doubt about points 1 and 2 and 10.

    This times, thai banks are not really on the front line (they were in 97). We have NPL of course, they will grow, but we can’t compare with european and US banking systems.

    Violent protests in Bangkok and the return of Thaksin ? Too early I think. After 2009.

  3. 3 fall 1 February 2009 at 12:01 pm

    Hold on a damn minute! 66,000,000,000 per month on salary? How many civil servant are they employing?
    Let’s guess 1,000,000 civil servant, that would roughly be salary of 66,000 per person/month. No, I dont think they would earn that much.
    What’s going on here?

  4. 4 Insanity 1 February 2009 at 12:15 pm

    New tax breaks to save jobs considered

    http://www.bangkokpost.com/business/economics/10789/new-tax-breaks-to-save-jobs-considered

    ”But, frankly, the government cannot offer tax relief to everyone. As it stands, government revenue this fiscal year looks set to be more than 130 billion baht below target,” Dr Somchai said.

  5. 5 Prokster 1 February 2009 at 12:20 pm

    On Thai banks you are right. They will see a long slide down from here, but will not fall to levels seen during the local crash. Brokers and finance companies will suffer more than the banks, but what we will see is a change in their LT lending habits as manufacturing itself changes due to the global contraction in capacity that is under way.
    Things do not look good for TH, but there will be plenty of others with riots and huge protests with more violence than the 80’s, so it’s hard to fell good about things even if you are still in a job.

    In terms of gold doubling, it is possible but I assume it will only occur through a massive push on margined futures, not through demand for the physical. I think US$ 1200-1300 is a more likely possibility. The local Chinese gold merchants are disgrace…not willing to hand over cash when the price spiked to >900. They are handing out paper. At least the SET gold futures will be something for locals to use as hedge…if the Yaworat lobby powers fail to derail it a 2nd time.

  6. 6 Insanity 1 February 2009 at 1:17 pm

    ThaiCrisis
    Do you have any information on food inflation within Thailand?

    Food inflation is increasing worldwide. It seems that food prices are unaware that they should be falling, because they are instead rising fast all around the world.

    For example in India, after more than two months of steady decline, inflation has risen for the second week in a row due to a spike in food prices. The Economic Times reports that Indian inflation touches 5.64 pc with no respite as prices rise.
    http://economictimes.indiatimes.com/Economy/Inflation_inches_up_to_564/articleshow/4049566.cms

    In Australia, Farm Online reports that fruit prices up 8pc, despite big CPI fall.
    http://sl.farmonline.com.au/news/nationalrural/horticulture/fruit/fruit-prices-up-8pc-despite-big-cpi-fall/1418723.aspx

    In South Africa, the Business Day reports that food remains a worry despite falling CPIX.
    http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A927810

    In Northern Ireland, the Belfast Telegraph reports that the food bills soar at more than double the inflation rate.
    http://www.belfasttelegraph.co.uk/news/local-national/food-bills-soar-at-more-than-double-the-inflation-rate-14159588.html

    In Canada, the Ottawa Citizen reports that consumers face higher costs despite low inflation.
    http://www.ottawacitizen.com/Business/Consumers+face+higher+costs+despite+inflation/1210939/story.html

  7. 7 ThaiCrisis 1 February 2009 at 1:33 pm

    Very easy. Go to :
    http://www.price.moc.go.th/price/cpi/index_new_e.asp

    Then click on “dec” for instance. You’ll get the readings for the CPI, with all the items, with comparisons y-o-y (+13 %), m-o-m etc.

    You’ll see that, yes, prices of food have increased.

    I’ve explained this on my latest articles about the CPI. Oil is causing a “distorsion”. This is aggravated by the subsidies (free electricity, free water etc.) decided last july.

    And I don’t think prices will go down. In a way, we have moved out of “surplus” times… The keyword now is “food security”… with a never ending increase of population world wide, increase of purchase power (population move from just rice to… much “richer” diets, like the chinese), less and less good lands, problems of irrigation… that lead to huge stress on the food production system.

    Therefore food should stay a hot product.

    Food (along with water) is definitely the next crisis… cooking… Just a matter of times. Sorry to be so gloomy, but that’s my second name. 😉


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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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