The government’s planned two trillion baht investment in infrastructure development megaprojects would boost economic growth by another 1% annually over the next 7-8 years, Fiscal Policy Office director-general Somchai Sajjapongse said on Friday.
Speaking at a forum on “Investment Strategy for Thailand’s Future”, Mr Somchai said that in some years the investments in these projects could create additional economic growth of 1.3 per cent to 1.5 per cent per year.
Such a huge investment could also have some negative impacts. For example, inflation is likely to increase by an extra 0.16 per cent a year, but this was still low and it would not affect economic stability.
The investment would also result in a deficit in the government’s current account, as more raw materials and machinery would be imported. But this would also be good for the economy, he added.
Churarat Sutheethorn, director-general of the Public Debt Management Office, said the two trillion baht in loans being acquired by the government would increase the public debt to no more than 50 per cent of gross domestic product, from the current 45 per cent.
This is because the money would be raised gradually over seven years, and would include offerings of government investment bonds and government savings bonds to the public, she said.
Prasong Poonthanes, director-general of the State Enterprise Policy Office, said that a total of four trillion baht was needed to finance the Transport Ministry’s infrastructure megaprojects.
Of the total, two trillion baht would be derived from loans and the remaining two trillion would come from the government budget and investment by state enterprises and the private sector.
The law on public and private partnership, allowing private companies to co-invest in government development projects, had been approved and was pending announcement in the Royal Gazette, Mr Prasong said.
This legislation would facilitate investment and help curb the public debt, he added.
Kanit Sangsupan, director of the Fiscal Policy Research Institute, admitted that investments in megaprojects had a high risk of corruption.
Therefore, the bidding must be transparent and the general public should be allowed to check out the bid winners, winning prices and also the progress of such projects, he said.
Mr Kanit suggested the government provide information on the projects through its websites, enabling people to always log on to see the projects’ details and progress.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong (File Photo)
Finance Minister Kittiratt Na-Ranong said on March 2 that a bill providing for financing of the projects would be submitted to parliament during the current session, before April.
The megaprojects involve mainly road, air and maritime transport network development, he added.
He said his ministry and the Transport Ministry were working together in proposing the huge infrastructure development strategy and the draft bill to the cabinet. The megaprojects would be carried out over the next seven and a half years and the public would be kept fully informed.
Mr Kittiratt said that the planned two-trillion-baht investment fund was worthwhile and in line with principles of financial discipline.
Thailand has set its public debt ceiling at no more than 60% of GDP. At present, public debt stands at about 43% of GDP.
Mr Kittaratt said the two trillion baht in loans would be secured gradually until the end of 2020. The government would maintain fiscal discipline to ensure that debt repayments each year would not exceed 15% of annual national expenditure.