Macroeconomics/fiscal budget 2024

Chatrudee Theparat

Cabinet gave a green light to issue additional expenditure of 2024 fiscal budget in a bid to provide budget for digital wallet scheme.

Deputy PM and Finance Minister Pichai Chunhavajira said that the cabinet approved an additional fiscal budget 2024 and a calendar to conduct an additional budget 2024. The government has planned to allocate an additional budget to stimulate the economy by implementing the digital wallet scheme.

Deputy prime minister and finance minister Pichai Chunhavajira said the cabinet gave a greenlight to issue additional expenditure in fiscal budget 2024

For the next step, the government will hold a meeting as soon as possible of the State Fiscal and Financial Disciplines Committee, chaired by Prime Minister Srettha Thavisin following on the State Fiscal and Financial Disciplines Committee Act, B.E.2561.

The committee needs to adjust a fiscal and financial framework in the medium term. The solution will be acknowledged to the cabinet this May 28.

Mr Pichai said the cabinet has assigned the finance ministry and the Budget Bureau to provide a 500 billion baht budget for the cash handout scheme.

Both agencies have discussed the appropriate solution of the source of funds. The best solution is the government to issue a draft of an additional budget bill 2024.

However, the government must consider three main laws including the Fiscal Budget Act, the State Fiscal and Financial Disciplines Committee Act, B.E.2561, Fiscal Discipline Act. The most important thing is the public debt framework, which is required not to exceed 70% to GDP.

The National Economic and Social Development Council (NESDC) reported as of the first quarter, the public debt to GDP was 63.4% to GDP.

Mr Pichai said the economic growth in the first quarter grew by 1.5%, as the lowest growth in Asean. This matter is therefore necessary for the government to stimulate the economy in the short term.

He said Thai economic restructuring needs to be reformed in order to boost economic growth in the long term. However, economic restructuring takes a long time to see the change.

The government also needs to attract new investment, especially new technology industries.

The Government House source said the additional budget in fiscal budget 2024 is expected at 122 billion baht.

Deputy finance minister Paopoom Rojanasakul accepted additional deficit in fiscal budget 2024

Deputy Finance Minister Paopoom Rojanasakul
said the source of funds to carry out the digital wallet scheme is set at 175 billion baht from the fiscal budget 2024.

At this time, sources of funding for the scheme is from the central budget in fiscal budget 2024 and a conducting additional expenditure of fiscal budget 2024.

For the part of issuing additional budget is added to the central budget that year, it was acknowledged that additional budget deficit recovery was required. However, it will be within the disciplinary framework. Financial matters and the use of this budget would help stimulate the economy, leading GDP to expand.

Therefore, it will be viewed in terms of lack of fierceness. It cannot increase the budget alone. But it has to look at putting money into it. The economy expanded from this measure as well.

To the question that if there was an additional deficit of the fiscal budget 2024, it would make the bond market tighten because the government wants to raise funds through issuing bonds. Mr Paopoom said that the government has been discussing with the Public Debt Management Office on the issue.

“There is no problem in this matter because the digital wallet project is designed for people to spend money and create for multiplier effect from the spending of the people. Shops will create a multiplier effect as the second round. The government can manage the liquidity without any problems.”