The House of Representatives has passed a 3.75 trillion baht budget for the fiscal year starting October, which will allow newly-appointed Prime Minister Paetongtarn Shinawatra to lift state spending to accelerate a nascent economic recovery.
The budget bill, which proposes a 4.2% increase in government spending from the revised outlay for current fiscal year, was backed by 309 lawmakers in its third and final reading in the 500-member House of Representatives late Thursday. A total of 155 lawmakers voted against the budget bill at the end of a three-day debate.
The bill will now be sent to the Senate for its approval and will be effective once notified in the Royal Gazette.
The budget outlay includes a provision to partly fund the coalition government’s controversial cash handout to jumpstart consumption and manufacturing. Ms Paetongtarn faces the challenge of reviving Southeast Asia’s second-largest economy that’s stifled by a near record-house hold debt, sluggish exports and a manufacturing sector weakened by cheap imports, mainly from China.
The new leader has pledged to take steps to lift the nation’s economy from a “crisis” and she’s due to unveil the details of her government’s policies in Parliament next week. Her government is set to rework the so-called “digital wallet” programme that promises 10,000 baht each to almost all adult Thais. The programme aims to turbocharge economic growth to 5%, more than double the average sub-2% growth rates for nearly a decade under military-backed rule.
Thailand’s financial markets have cheered the end of the monthslong political turmoil with the benchmark SET Index bouncing about 9% since Ms Paetongtarn was nominated as the new leader on Aug 15. The baht has gained about 3.7% during the period, reaching its highest level in more than a year, part of a broader rally in anticipation of rate cuts by the US Federal Reserve later this month.
The budget proposals include a deficit financing of 866 billion baht, or 4.5% of gross domestic product, based on projected growth of 2.8%-3.8% next year. The government projects headline inflation in a range of 1.1 to 2.1%, with the current account surplus estimated at 1.6% of the GDP.