Thai cabinet approves inflation target of 1-3 percent for 2021

The Red Line railway of the State Railway of Thailand. Increased public debt is attributed to measures to rehabilitate the economy and to infrastructure projects (Photo: BangkokPost)

 Thailand’s cabinet on December 22 approved the inflation target range of 1-3 percent for 2021 as set by the Finance Ministry and the Bank of Thailand’s Monetary Policy Committee (MPC).

Spokesperson of the Government Anucha Burapachaisri said the target is appropriate for the current situation and support the economy, adding it is flexible and has already factored in the coronavirus outbreak.

The MPC priorities supporting economic recovery, together with maintaining price stability and a healthy financial system.

The same day, the cabinet acknowledged the medium-term fiscal policy framework for 2022-25 that targets economic growth of 2.7-4.2 percent.

According to Anucha, under the medium-term framework, the government aims for 3-4 percent growth in 2022, 2.7-3.7 percent in 2023, 2.9-3.9 percent in 2024 and 3.2-4.2 percent in 2025.

Net revenue between 2022-25 is planned at 2.4 trillion THB (79.4 billion USD), 2.49 trillion THB, 2.61 THB and 2.75 THB, respectively, based on the assumption the government can collect value-added tax from overseas electronic service providers, additional fees from the frequency concession and more revenue from petroleum concessions.

Anucha said the government will still operate at a deficit, with expenditure estimated at 3.1 trillion THB in 2022, 3.2 trillion THB in 2023, 3.31 trillion THB in 2024 and 3.42 trillion THB in 2025.

The deficit is estimated at 700 billion THB for 2022, up to 710 billion THB in 2023, but down to 690.5 billion THB in 2024 and 669.50 billion THB in 2025.

As of Sept 30, the country's public debt amounted to 7.84 trillion THB, or 49.3 percent of GDP, up from 41.1 percent year-on-year. The rate remains under the 60 percent limit set for the country.

According to Anucha, the public debt ratio is projected to swell to 9.08 trillion THB in 2021 or 56 percent to GDP; 9.73 trillion THB in 2022 or 57.6 percent, and 10.40 trillion THB or 58.6 percent in 2023.

The public debt to GDP is projected to reach 10.97 trillion THB or 59 percent in 2024 and amount to 11.46 trillion THB in 2025 or 58.7 percent.

Anucha said higher public debt stems largely from the government borrowing to rehabilitate the economy and finance infrastructure projects./.
VNA