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Cabinet approves B100bn package
Bangkok Post – 5 November 2008
The cabinet yesterday approved an increase in the 2009 budget deficit by 100 billion baht to spur the economy and guard against mass layoffs amid a looming global economic recession.
The additional amount would raise the country's 2009 budget deficit to 349.5 billion baht, or 3.4% of gross domestic product (GDP), from 2.4% previously.
The government's economic measures, including the extra deficit, would help lift economic growth this year to 4%, said Finance Minister Suchart Thada-Thamrongvech.
The deficit money will be injected into sectors that can help the poor and create more jobs, including the village funds and the small, medium and large (SML) community lending programme.
Use of the funds, which are in addition to the government's 1.84 trillion baht budget for the fiscal year starting Oct 1, must be approved by parliament, he said.
The cabinet also approved the Finance Ministry's plan to provide 110 billion baht for crop mortgage programmes. These will be administered by the state-owned Bank for Agriculture and Agricultural Co-operatives (BAAC) with loans from Krung Thai Bank, the Government Savings Bank, Siam City Bank and TMB Bank backed by the ministry.
Of the planned budget of 110 billion baht, 97 billion would be allocated to buy 8.5 million tonnes of rice paddy from the main 2008-09 crop, with the remaining funds slated to support corn and cassava prices.
Additional spending on energy infrastructure is also expected to go ahead to stimulate the economy and create jobs.
Energy Minister Wannarat Charnveerakul said the ministry would propose energy megaproject investments worth hundreds of billions of baht to a committee on economic stimulus policies chaired by Deputy Prime Minister Olarn Chaipravat.
Mr Wannarat said the five-year plan would start with projects valued at 30 billion baht to begin construction next year, and would include power plants, power transmission lines, gas pipelines and a liquefied natural gas (LNG) terminal.
"The investments would be carried out by PTT and the Electricity Generating Authority of Thailand and they would go ahead as planned in order to inject money to help soften impact of the economic slowdown," he said.
PTT Plc, majority owned by the Finance Ministry, would proceed with its 10-billion-baht fourth gas pipeline planned for 2009, even though power consumption growth might be flat due to the economic slowdown, said chairman Norkhun Sitthipong.
While the use of natural gas might grow more slowly than PTT had forecast, the 300-km pipeline from Rayong to Saraburi was vital basic infrastructure for independent power producers (IPP).
Two IPP licences are now in the bidding processes, said Mr Norkhun, who is also the deputy permanent secretary for the Energy Ministry.
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