Government tax revenue is up substantially on budget predictions, but Finance Minister Kittiratt Na-Ranong's attention remains firmly fixed on the stubbornly appreciating baht.
The minister said on Thursday the Thai currency has been steadily appreciating over the past year, and admitted, again, that this bothered him.
Mr Kittiratt, deputy prime minister in charge of economic matters, was responding reports that the baht had risen to its strongest rate in 16 years against the US dollar - since the 1997 Asian financial crisis.
"As the minister overseeing the country’s monetary and fiscal matters, I have been watching the persistent strengthening of the baht with a heavy heart," he said.
Kittiratt Na-Ranong (Photo by Patipat Janthong)
The minister said he was worried because the Thai currency stood at 31 baht to the US dollar in April 2012, just 12 months ago.
“The baht’s rapid appreciation makes me feel uncomfortable, but the agency overseeing the exchange rate [the Bank of Thailand] is not under my supervision, so I cannot interfere with it.
“In addition, the Bank of Thailand has a large number of experts to oversee the country’s monetary policy,” he said.
The strong baht had both advantages and disadvantages. For the industry sector, essential imported goods would be cheaper. In contrast, the export sector suffered because Thai goods and services cost more overseas, he said.
Foreign tourists visiting Thailand also felt the affect of a stronger baht, which made their time here more expensive and this affected tourism related businesses.
This could have a negative impact on employment in these sectors, he said.
Asked if he expected the baht to get even stronger in the future, Mr Kittiratt declined to answer. He said he wanted the central bank to remain independent in overseeing the movement of the Thai currency.
If a strong baht were the result of a trade surplus, it would be understandable by all sides. But if it occurred when the country faced a trade deficit due to a large foreign direct investment inflow with investors looking for profit in the bond market, it would be a cause of concern, he said.
Exports have contracted since February, reflecting the fact that exporters have been affected, he added.
Fiscal Policy Office director-general Somchai Sujjapongse said on Thursday tax collection in March totalled 151 billion baht, which was 1.3% or 1.88 billion baht higher than the projection, thanks to higher individual tax collection.
The first-car buyer policy also resulted in higher automobile tax collections, he said.
Therefore, the government has total revenue of 978.8 billion baht in first half of fiscal year 2012 (October 2012 to March 2013), 10.7% or 94.86 billion baht higher than the target.
Three revenue-collection departments under the Finance Ministry -- revenue, excise and treasury -- brought in 59.99 billion baht more than the target, up 6.4%. This was the result of expansion of domestic consumption, higher household earnings and growth in real estate.
Other departments and state-enterprises contributed 41.87 billion baht (up 78%) and 5.77 billion baht (12.8%) more than the target.
Mr Somchai said the government’s measures to support economic growth helped boost the economy, particularly domestic consumption. The government is now confident it will collect 2.1 trillion baht in revenue for fiscal year 2013.