Thailand plans deficit budget for 2010/11
(Reporting by Kitiphong Thaichareon; Writing by Vithoon Amorn; Editing by Martin Petty)
2010-01-26

BANGKOK, Jan 26 (Reuters) - Thailand's government plans to propose a 2.07 trillion baht ($62.7 billion) fiscal budget for the year to September 2011, up from 1.70 trillion a year earlier, Finance Minister Korn Chatikavanij said on Tuesday.

The 2010/11 budget plan includes a 420 billion baht fiscal deficit, up from around 350 billion baht estimated for the current year, according to Korn, who outlined the plan to reporters after a cabinet meeting.

Analysts estimate that, with an additional 200 billion baht of off-budget stimulus spending being made by the government to support the economic recovery, the actual 2009/10 government budget deficit may rise to around 440 billion.

At least another 150 billion baht in stimulus spending outside the fiscal framework is allocated for 2010/11.

Korn's increased budget deficit target raised concern among some economists, who said it could aggravate the country's debt burden and undermine its credit ratings.

Montree Socatiyanurak of Bangkok's National Institute of Development Administration said the 2010/11 fiscal deficit should be capped at 350 billion baht.

"I don't see a need for a deficit of over 400 billion which would put an excessive burden on our national debt position and hurt our sovereign ratings," he said in a note to clients.

"It might affect us later in the same way, as experienced by Greece or Spain, which have seen their ratings downgraded because of their spiralling public debts," he said.

The Bank of Thailand forecast last week that the economy would grow 3.3 to 5.3 percent in calendar 2010 after a forecast 2.7 percent contraction in 2009, the country's first recession since the 1998 Asian economic crisis.

The Finance Ministry says the 2010/11 budget bill was based on the economy expanding 3.5 to 4.5 percent in 2011.

Prime Minister Abhisit Vejjajiva will probably submit the 2010/11 budget bill to parliament in June.

($1 = 33.00 baht)

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