Government pushes investment to cover export losses
State agencies have been told by the Finance Minister Kittiratt Na-Ranong to speed up investment as a way of helping to drive the economy forward in light of faltering exports caused by the strength of the Thai baht and a generally weak global marketplace.
The Finance Minister said a plan had been put in place earlier to use 400 billion baht annually to invest within the economy in an effort to keep boosting its strength. Exports have been worse than expected this year, putting added pressure on the proper disbursement of the investment funds.
The Commerce Ministry had earlier expected exports to grow by about nine percent in the first quarter of 2013 but the result had actually been half this, at just 4.5 percent. Even internal household consumption only grew by 1.4 percent year-on-year in March, compared with 3.3 percent the previous month.
Then again, private investment expanded by 11 percent over the same period compared to 2012.
The National Economic and Social Development Board (NESDB) said net revenue for the government for the first quarter had fortunately come in higher than expected. The forecast had been for 884.1 billion baht but in fact the returns were 979 billion baht.
The Finance Minister noted that the global economy had been predicted to grow by 3.5 percent in 2013 but most pundits were suggesting it will now be more like 3.3 percent. Some of this slowdown will effect Thai exports and so Khun Kittiratt has instructed his agencies and others to find ways of opening up new markets to local products. He said he is also open to suggestions on other ways to improve the overall economy.
Private sector think tanks and operators have already made suggestions to the government on ways of boosting the export trade.
The Finance Minister did claim that state agencies have been very efficient at disbursing the investment funds made available to them. According to figures released by his department, a total of 1.66 billion baht or just over 40 percent of the total investment budget had already been disbursed. This was apparently higher than the original target level.
Out of the regular budget, Khun Kittiratt stated 61 percent, or 1.22 trillion baht, had been distributed already.
On the back of these high levels of disbursement the NESDB stated the industrial sector grew by 2.9 percent, although because farm prices fell by a substantial four percent in March, farm incomes also dropped, by about 2.2 percent.
As at the start of May this year public debt amounted to over five trillion baht which equates to 44.1 percent of Gross Domestic Product (GDP).