The government is planning to reduce the budget deficit for 2014 to around 225 billion baht, or only 2% of gross domestic product, to boost investor confidence, Finance Minister Kittiratt Na-Ranong said on Friday.
The budget deficit estimates would substantially drop from 400 billion baht in 2011 and 2012. The budget deficit for 2012 was actually set at 350 billion baht but due to the great flood late last year the government had spent an additional unbudgeted 54 billion baht to offset flood damage, he said.
The government expected the 2% targeted budget deficit in 2014 would help restore confidence of both Thai and foreign investors. The deficit reduction in 2014 would equal one-fourth of the 300 billion baht budget deficit set for next year, Mr Kittiratt said.
“It is acceptable to the international community that a country with a budget deficit of no more than 3% has strong financial and fiscal status,” he said.
The US and some countries in the European Union have higher budget deficit figures than Thailand, he added.
In order to achieve the target, he said, the government would have to be more effective in collecting tax revenues and successfully boost domestic spending.
The government is set to propose a two trillion baht infrastructure and transportation system development megaprojects law to the House of Representatives for consideration, the minister said.
The seven-year development projects would create connectivity in product transportation networks, cut logistical costs and help stimulate sustainable economic growth.
Mr Kittiratt admitted that loans acquired for these projects would raise the country’s public debt to about 50% of GDP, but it was still lower than the set public debt ceiling for sustainable fiscal status of 60% of GDP.