New Thai govt approves higher spending, budget deficit for fiscal 2024

BANGKOK (Reuters) -Thailand’s new cabinet on Wednesday approved a plan for higher fiscal 2024 spending of 3.48 trillion baht ($97.29 billion) and a larger budget deficit of 693 billion baht, the government said.

The government expects gross domestic product (GDP) growth of 3.2% next year, it said in a statement.

It targeted a public-debt-to-GDP ratio of 64% at the end of the 2024 fiscal year. The targets were part of a revised medium-term plan up to fiscal 2027.

“The implementation of fiscal policy in the medium term still requires expansionary fiscal policy through deficit budgeting to support economic growth while strengthening the fiscal sector,” the government said.

The 2024 budget process had been put on hold as a new government only took office last month, three months after an election in May. The state planning agency said the budget would likely be ready in April 2024, well after the start of the new fiscal year in October.

Prime Minister Srettha Thavisin will meet to consider and review the budget plan on Thursday.

The budget plan comes as the incoming administration, led by the populist Pheu Thai Party, prepares a raft of new policies to ease the cost of living, suspend debts for farmers, raise minimum wages and provide handouts to all adult Thais via digital wallets to kick-start a weakened economy.

The budget earlier this year approved by the previous government projected a 5.18% rise in spending to 3.35 trillion baht, including 717 billion baht in investment. It projected a 14.68% drop in the budget deficit to 593 billon baht, or 3% of GDP.

($1 = 35.77 baht)

(Reporting by Kitiphong Thaichareon and Orathai Sriring; writing by Martin Petty; editing by Jason Neely and Alex Richardson)