In 2009, global financial crisis will have an impact over Thai economy. Particularly on export sector, tourism sector, consumer and producer confidence, this in turn will affect spending pattern and investment expansion.
Therefore, priority of the economic policy management in 2009 should be on stimulating and improving the economic structure concurrent with measures to alleviate the impact of global economic slowdown and to activate economic growth, especially to in low income and disadvantaged group. Economic policy management guidelines are as follows:
(1) The budget disbursement in fiscal year 2009 and the additional allocation of 100 billion baht additional budget must be accelerated, which partly will be for grass-root economy stimulation and increase liquidity for SMEs through specialize financial institution. In addition, it is essential to speed up budget disbursement of mega projects by achieving target of 94 percent disbursement rate of government budget and 80 percent of SOE’s investment budget especially the budget that goes directly toward people and communities. Achieving disbursement target of community budget is necessary to fully support the alleviation of household expenditure in short-run and promote self reliance in long-run.
(2) Appropriate welfare measures must be provided to unemployed people, with proper skill improvement training if new career is needed.
(3) Closely monitor sectors that will be severely affected; such as tourism sector, export sector and real estate sector. Counter measures must be implemented, including continuously promote export and tourism by focusing on new market, upgrade product standard and improve marketing network.
Corporation between public and private sectors is crucial for success of counter measures.
(4) Measures to relieve impact of steep decline in agricultural price should be provided for farmers in order to achieve, with proper future production planning and sufficient return.
(5) Energy price must be properly managed with appropriate level of energy fund accumulation for unexpected event.
(6) Easing monetary policy, under favorable circumstance where oil price and inflationary pressure had softened, and assurance of sufficient and accessible liquidity in the capital market especially for small and medium-enterprises.
Economic Performance in Q3 and outlook for 2008 - 2009 November 24, 2008 Office of National Economic and Social Development Board 44 Economic Projection of 2008-2009
Economic Projection of 2008-2009
Projection
Actual Data 2008_f 2009_f
2006 2007 Aug_f Nov_f Nov_f
GDP (at current prices: Bil. Bht) 7,841.3 8,493.3 9,410.1 9,232.2 9,813.8
GDP per capita (Bht per year) 120,933.0 128,686 142,577.1 139,881.8 147,576.6
GDP (at current prices: Bil. USD) 206.9 245.8 284.3 277.2 284.5
GDP per capita (USD per year) 3,191 3,724 4,307.5 4,200.7 4,277.6
GDP Growth (at constant prices, %) 5.2 4.9 5.2-5.7 4.5 3.0-4.0
Investment (at constant prices, %) 3.9 1.3 6.2 2.3 4.8
Private (at constant prices, %) 4.1 0.6 7.3 4.0 3.8
Public (at constant prices, %) 3.3 3.4 3.0 -2.7 8.0
Consumption (at constant prices, %) 2.9 2.7 3.5 2.1 4.3
Private (at constant prices, %) 3.0 1.6 3.2 2.6 3.7
Public (at constant prices, %) 2.4 9.2 5.0 -1.0 8.0
Export volume of goods & services (%) 9.1 7.1 8.5 7.6 4.4
Export value of goods (Bil. USD) 127.9 150.0 174.8 180.07 192.7
Growth rate (%) 17.0 17.3 16.5 20.0 7.0
Growth rate (Volume, %) 11.2 11.0 8.0 8.0 4.0
Import volume of goods & services (%) 3.3 3.4 8.4 7.7 5.2
Import value of goods (Bil. USD) 126.9 138.5 171.2 181.05 199.2
Growth rate (%) 7.9 9.1 23.6 30.7 10.0
Growth rate (Volume, %) 1.3 3.6 9.5 9.5 5.0
Trade balance (Bil. USD) 1.0 11.6 3.6 -1.0 -6.5
Current account balance (Bil. USD) (1/) 2.3 14.0 7.5 -0.3 -3.5
Current account to GDP (%) 1.1 5.7 2.6 -0.4 -1.2
Inflation (%)
CPI 4.7 2.3 6.5-7.0 5.6 2.5-3.5
GDP Deflator 5.0 2.7 5.5-6.0 4.2 2.5-3.5
Unemployment rate (%) 1.5 1.4 1.5 1.4 1.5-2.5Source: Office of National Economic and Social Development Board, 24 November 2008
Note: (1/) Reinvested earnings has been recorded as part of FDI in Financial account, and its contra entry recorded as income on equity in current account.
Budget Management Framework in FY 2009
The Government has set the budget expenditure for FY 2009 at 1,835,000 million baht, equivalent to 18.2 percent of GDP, an increase of 175,000 million baht or 10.5 percent over that FY 2008, while the net revenue is estimated at 1,585,500 million baht. Borrowing of 249,500 million baht or 2.4 percent of GDP will be made to balance the deficit budget. The B.E. 2552 (A.D. 2008) Budget Act has come into force on and from October 14, 2008.
For FY 2009, total revenue are estimated at 1,585,500 million baht, consisting of direct tax (751,000 million baht), indirect tax (1,017,497 million baht), income from state enterprises (131,503 million baht). After the deduction of the Revenue Department’s tax rebates, export duties compensation and the allocation of value added tax to provincial administrative organization at the amount of 242,600 million baht, the government has to issue bond at the amount of 249,500 million baht to offset the deficit.
The structure of expenditure (total amount 1,835,000 million baht), comprises of (1) Current Expenditures (1,336,466 million baht), equivalent to 72.8 percent of the total budget, increased by 10.1 percent, (2) Capital Expenditures (407,318 million baht), equivalent to 22.2 percent, increased by 1.8 percent, (3) Principal Repayment (3,676 million baht) and (4) Use of Treasury Cash Balance (27,540.2 million baht). Target for budget disbursement rate in FY 2009 is set at 94 percent of total budget expenditure. Capital expenditures are expected to be reimbursed at least 74 percent of the total capital expenditure.
Period Budget target each quarter Budget target accumulate at the end of Budget target of accumulate disbursement
(Million Baht) period (Million Baht) rate at the end of period (%)
Oct.-Dec. 2008 412,875 412,875 22.5
Jan-Mar 2009 431,225 844,100 46.0
Apr-Jun 2009 440,400 1,284,500 70.0
Jan-Sep 2009 440,400 1,724,900 94.0Source: Ministry of Finance
The cabinet approved the additional budget expenditure for FY 2009 in the amount of 100 billion baht to counter lobal crisis and Thai economic slowdown. It will be proposed to the parliament and senate for approval. The B.E. 2552 (A.D. 008) Additional Budget Expenditure Act for FY 2009 will come into force on and from the date of it’s publication in the overnment gazette, which is expected to be done early 2009.
The cabinet endorsed the public debt management framework in the amount of 1,200,000 million baht in FY 2009, omprising of 1,095,191.89 million baht for public debt management plan and 10 percent reserve of the plan for adjustment.
Action Plan Total (Million Baht) 1. Government Domestic Debt Management 513,576.19 2. FIDF Debt Management 218,190.72 3. Stabilize Financial Institution Debt Management n.a. 4. State Enterprises Debt Management 184,838.89 5. External Debt 81,563.44 6. Foreign Debt Management 97,022.65 Total 1,095,191.89
Source: Ministry of Finance
--National Economic and Social Development Board--