The parliament voted to pass the 2020 fiscal year budget bill during the revote on the bill’s second and third readings. The bill was passed in the third reading with a vote of 257 to one, with three abstentions.
The bill sailed through the revote as expected, as it had previously been scrutinised by the parliament. The passing of the bill is good news for the government and the economy. The government is facing a no confidence vote on February 28, while the economy has seen a slowdown since last year and government spending is seen as one of the keys to its recovery.
The outbreak of the coronavirus and the worst drought in 40 years have also wreaked havoc on the economy, with both the tourism and agricultural sectors down. The disbursement of the budget, worth 3.2 trillion baht, should help increase investors’ confidence, as well as provide a boost to shares of construction companies that are involved in government investment projects.
The Senate has set the date to debate the bill again on Friday before they can approve it and send it to be published in the Royal Gazette. This means that the budget could be ready for disbursement by next week.
Maria Lapiz, Managing Director at Maybank Kim Eng Securities said earlier that the carry over budget of 333 billion baht, along with the 660 billion baht new capex, some 615 billion baht of the budget could be spent in 2020, accounting for 4 per cent of nominal GDP.
Don Nakornthab, senior director for macroeconomic and monetary policy at the Bank of Thailand (BOT) told a business seminar on Thursday that a less than 2 per cent economic growth is possible for 2020, with growth in the first quarter “highly likely” to be less than 1 per cent.
The BOT said earlier that a growth of 2.8 per cent was no longer attainable this year. The Ministry of Tourism and Sports now expects the coronavirus outbreak to reduce the number of foreign visitors by 5 million people. This could be calculated to a loss of 250 billion baht, or 1.5 per cent of the GDP, as the tourism sector accounts for 20 per cent of the country’s total output.
Don also added that the latest cut to the country’s benchmark lending rate down to its historic low of 1 per cent might not help the economy “that much” but their intention is to send a signal to the private sector that they should invest to help the economy.