BANGKOK : Thailand expects only a small economic impact from a delay in the fiscal budget as the country awaits the formation of a new government after May’s national election, a finance ministry official said on Friday.
The 2024 fiscal budget was put on hold before the elections and projects spending at 3.35 trillion baht ($96.79 billion). It will need approval from the next government, the parliament and the king before taking effect.
The budget could be delayed by up to six months from the start date in October, but is expected to affect economic growth by just 0.05 per centage point, Krisada Chinavicharana, the ministry’s permanent secretary, told reporters.
The government has prepared some 120 billion baht to shore up Southeast Asia’s second-largest economy and will speed up investment and other spending, he said.
The Thai economy has been increasingly reliant on the tourism sector amid declining exports caused by slow global demand.
The ministry forecast economic growth at 3.6 per cent this year and will review that projection later this month.
The business sector has expressed concerns that a prolonged delay in forming a new government and the budget will hurt the economy and investor confidence.
On Thursday, Thailand’s election-winning Move Forward party leader Pita Limjaroenrat lost the crucial vote on the premiership after the Senate and parties of the outgoing, army-backed government closed ranks to deny him the top job.
Pita can run again if nominated in the next vote, which takes place on July 19.
($1 = 34.61 baht)
(Reporting Kitiphong Thaichareon, Writing by Orathai Sriring; Editing by Devika Syamnath)