February 26, 2020 / 9:38 AM / a month ago

Thai king signs delayed $100 billion budget into law

FILE PHOTO: Thailand's King Maha Vajiralongkorn attends the annual Royal Ploughing Ceremony in central Bangkok, Thailand, May 9, 2019. REUTERS/Athit Perawongmetha

BANGKOK (Reuters) - Thailand’s King Maha Vajiralongkorn has signed into law a delayed $100 billion budget for the current fiscal year that aims to revive Southeast Asia’s second-largest economy, according to the Royal Gazette.

The budget, delayed since the Oct. 1 start of the 2020 fiscal year, forecasts a rise of 7% in overall spending to 3.2 trillion baht ($101 billion), with a deficit of 469 billion baht.

The budget is much needed to shore up the economy which expanded just 2.4%, the slowest pace in five years, last year, due to declining exports and sluggish investment.

This year will likely be tougher as tourism is being hit by the coronavirus outbreak, which originated in China, Thailand’s biggest source of foreign visitors.

Spending, however, may not be quick, analysts say.

“We think it is unlikely that expenditure disbursements will accelerate immediately, particularly for public sector capex as projects take time to kick off,” said Charnon Boonnuch, economist of Nomura in Singapore.

“At the very least, overall fiscal spending should remain weak in Q1 and continue to weigh heavily on construction activity,” he added.

He forecast growth of just 0.2% in the first quarter from a year earlier and a 0.6% contraction from the previous quarter.

Earlier this month, Finance Minister Uttama Savanayana said the government expected public investment spending of more than 400 billion in the second quarter, and more than 80% of the total investment budget should be disbursed in this fiscal year that ends Sept. 30.

Reporting by Orathai Sriring and Panarat Thepgumpanat; Editing by Jacqueline Wong

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