The
budget's approval was key for the survival of the coalition
government, which has a slim majority in parliament. A defeat
would have forced former junta leader Prayuth Chan-ocha's
government to either resign or dissolve parliament.
After a four-day debate, the draft bill's second and third
readings passed with 253 votes. There were 196 abstentions in
the 450-member parliament.
The proposed budget foresees a 7% rise in overall spending to
3.2 trillion baht ($105.89 billion) for the fiscal year that
began on Oct. 1. It sets a deficit of 469 billion baht, up 4.2%
from the 2019 fiscal year.
"The government will ensure that the approved budget will be
used effectively for the country's security and the people's
prosperity," Prayuth told parliament.
The draft bill is expected to come into effect in February
following a vote in the senate, which meets on Jan. 20, and the
king's endorsement, Budget Bureau chief Dechapiwat Na Songkhla
told Reuters.
Its passage was pushed back after delays in the formation of the
cabinet following an election in March that saw Prayuth win
another term as prime minister.
"The challenge here is how to speed up disbursement, which has
been subdued since October due to the budget delay," said
Charnoon Boonnuch, an economist at Nomura in Singapore.
More fiscal stimulus is needed to help economic growth, he said,
adding two rate cuts by the central bank already pushed the key
interest rate <THCBIR=ECI> to a record low of 1.25% last year
amid a deteriorating outlook.
He expected a further rate cut at the central bank's policy
review on Feb. 5.
The central bank forecast economic growth at 2.8% for this year
and 2.5% for 2019 -- the slowest pace of growth in five years.
($1 = 30.22 baht)
(Graphic: Thailand's growth and peers link:
https://fingfx.thomsonreuters.com
/gfx/mkt/13/315/315/Thai%20growth%20VS%20regional%20peers.png)
(Editing by Clelia Oziel)
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