BANGKOK (Reuters) – Seeking to bolster a flagging economy, Thailand’s cabinet approved on Tuesday a plan to boost its budget deficit by 11.5% from the current fiscal year to 523 billion baht ($17.33 billion) for the 2021 fiscal year starting on Oct. 1.
“The government needs to help sustain economic growth, to be prepared for structural changes in the economy… and to support investment in the country, government spokeswoman Narumon Pinyosinwat told reporters.
The budget plan projects spending of 3.3 trillion baht, up 3.1% from the current year’s 3.2 trillion baht, she said.
The 2021 deficit is project to be equivalent to 2.8% of gross domestic product (GDP), higher than the target of 2.7% for the 2020 fiscal year.
The budget plans for a 5.7% increase in government investment to 693 billion baht for the 2021 fiscal year.
The budget planners have assumed economic growth will recover to 3.1%-4.1% in 2021. Southeast Asia’s second-largest economy has lagged most of its regional peers for years. The central bank expects growth of 2.8% this year and 2.5% in 2019, which would be the weakest in five years.
($1 = 30.18 baht)
(Reporting by Panarat Thepgumpanat; Writing by Orthai Sriring; Editing by Simon Cameron-Moore)