Will the 2024 fiscal year save the Thai economy?

Photo courtesy of Thai Enquirer

Deputy Finance Minister Julapun Amornvivat revealed that Thailand‘s eagerly awaited 3.48 trillion baht budget for the 2024 fiscal year won’t see the light until early May.

Originally set to kick off on October 1, the budget got tangled in the web of politics, with May’s election and the lengthy government formation process pushing the official start to September 5.

According to Julapun, this delay means no government budget until May, posing a real threat to state investment spending.

Faced with this financial fiasco, Julapun proposed a game-changing strategy: a tax deduction bonanza of up to 50,000 baht for purchases made between January 1 and February 15. This move, if successful, could inject a whopping 70 billion baht into the economy, boosting growth by 0.18 percentage points.

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The Pheu Thai-led government is banking on a digital wallet scheme to be the ultimate savior, promising a major consumption-led boost. Its launch is now postponed to May, leaving citizens eagerly awaiting a tech-driven financial revolution. The government is considering borrowing a jaw-dropping 500 billion baht to fund a lavish 10,000-baht handout to 50 million people. The Council of State, the legal brains behind the throne, holds the key to the legality of this grand plan.

Prime Minister Srettha Thavisin, also wearing the finance minister hat, paints a grim picture, declaring the economy in crisis. This dire sentiment is echoed by other high-ranking Pheu Thai figures, justifying their ambitious populist programmes, reported Bangkok Post.

To add fuel to the financial fire, Thailand’s economy clocked in at a lacklustre 1.5% growth in the third quarter, the slowest pace this year, grappling with feeble exports and government spending. The World Bank poured more cold water on Thailand’s hopes, predicting the country’s potential growth to be the lowest among ASEAN economies for the next two decades, thanks to ageing demographics and a private investment slowdown.

In related news, a proposed restructuring of the beverage tax framework is under consideration by the Finance Ministry, as revealed by the permanent finance secretary, Lavaron Sangsnit. The restructure aims to bolster tourism and domestic spending. Read more about this story HERE.

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Mitch Connor

Mitch is a Bangkok resident, having relocated from Southern California, via Florida in 2022. He studied journalism before dropping out of college to teach English in South America. After returning to the US, he spent 4 years working for various online publishers before moving to Thailand.

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