Macroeconomics/fiscal 2024 budget

Chatrudee Theparat

Thai economy is projected to grow by 3.8% in 2024

Four agencies agreed to project the Thai economy will grow 3.8% after they met together to finalize the framework of the fiscal year 2024.

They include the Finance Ministry, the Budget Bureau, the National Economic and Social Development Council and the Bank of Thailand.

The meeting, chaired by Prime Minister Prayut Chan-o-cha, agreed to conduct the fiscal year 2024, based on an economic growth of 3.8% in projection.

Secretary General to the National Economic and Social Development Council (NESDC) Danucha Pichayanan said the projection of 3.8% economic growth in 2024 is based on a prediction that Thai exports in 2024 would be improved from 2023 after being hit by global slowdown.

The global trade is projected to grow by 3.7% in 2024, up from 2.5% in 2023 while the global trade is projected to rise by 4.5% in 2022.

Secretary General to the National Economic and Social Development Council (NESDC) Danucha Pichayanan

Mr Danucha said the government projected revenue collection would achieve its target in 2024, which is based on an assumption that its economy will show improvement thanks to a rise of private consumption and private investment and positive tourism outlook.

The government has set the fiscal year with a deficit of 593 billion baht, lower than a deficit of 695 billion baht in fiscal year 2023, aimed at having a balance budget following the medium-term fiscal policy framework for fiscal 2024-2027.

Mr Danucha said the government needs to reduce a deficit of fiscal budget to be in line with the policy framework and global standard. Thailand has faced a high deficit budget in the past two years because of getting impact from pandemic.

The Budget Bureau plans to ask for approval from the cabinet meeting next week for a 3.35 trillion baht budget in fiscal year 2024. Also, state agencies are required to propose their proposals to the Budget Bureau from January 27, 2024.

The cabinet last week approved a framework of the fiscal year 2024 with the expenditure at 3.35 trillion baht. Of 593 billion baht represents around 3% of gross domestic products (GDP).

Setting the 2024 fiscal year is the first year to be relied on the medium-term fiscal policy framework for fiscal 2024-2027. The government has targeted to have a deficit of not more than 3% to GDP in order to pave the way for Thailand to enter a balance budget to ensure fiscal stability.

The government expects to collect revenue of 2.75 trillion baht in 2024, up 10.7% from the revenue collection in 2023. In fiscal year 2024, the government will maintain the investment proportion at 20% or 700 billion baht.

The fiscal 2024 budget framework was endorsed by the state Monetary and Fiscal Policy Committee chaired by Gen Prayut two weeks ago. The expenditure of fiscal year 2023 is set at 3.18 trillion baht with a deficit of 695 billion baht, which is equal to 3.7% of GDP.