Thailand Lawmakers Approve $96 Billion Budget Bill After Delay

(Bloomberg) -- Thailand’s parliament approved a nearly $96 billion spending plan for the 2024 fiscal year, belatedly clearing the way for Prime Minister Srettha Thavisin’s administration to ramp up public spending to support Southeast Asia’s second-largest economy.

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The 3.48 trillion baht budget for the fiscal year that began Oct. 1 last year was backed by 298 lawmakers in the 500-member House of Representatives in a final vote late on Friday. A total of 166 lawmakers voted against it and one abstained following a three-day debate, according to the results.

The budget, which will see a financing shortfall of 693 billion baht or 3.6% of gross domestic product, will test the government’s ability to accelerate public disbursement and shore up growth amid rising external headwinds.

Thailand, whose economy has been expanding at an average sub-2% pace for a decade in a region where growth upwards of 4% is the norm, could see its post-pandemic recovery sputter in the event of delays to budget spending.

Already, the six-month delay in pushing the budget through will exert a significant drag on gross domestic product growth, Bank of Thailand Assistant Governor Piti Disyatat said in an interview with Bloomberg Television earlier Friday.

While the budgetary funds are expected to be disbursed starting in April, the legislation does not provide support for Srettha’s flagship “digital wallet” program. Designed to stimulate the economy, the government plans to hand out a total of about $14 billion in cash to some 50 million eligible adults — money they are then required to spend on select goods and services.

Borrowing separately to fund the digital wallet program could inflate public debt, which may raise concerns about fiscal stability and risk a credit rating downgrade. Thailand’s budget deficit has already notched the sharpest increase in the region.

Srettha has repeatedly called for the central bank to lower borrowing costs to ease the burden on the public. Higher interest rates aren’t the only problem for the economy: it faces the looming impact from the crop-wilting weather phenomenon El Nino, near-record high household debt levels and sluggish exports.

Srettha, who took office in September, has been focused on stimulating the post-pandemic economy that he has repeatedly said is in a “crisis.”

The budget bill is expected to pass the Senate on March 26. It will then be submitted for royal endorsement before taking effect.

--With assistance from Suttinee Yuvejwattana and Pathom Sangwongwanich.

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