The National Economic and Social Development Council (NESDC) has warned the new government to strictly maintain financial and fiscal discipline as it will affect foreign investors' confidence in the Thai economy, says secretary-general Danucha Pichayanan.
During a press conference on the economic outlook for 2023, Mr Danucha said Thailand has faced the Covid-19 crisis for the past two years, during which fiscal and monetary measures were deployed to the fullest to help the nation weather the crisis and support the economy to continue to expand.
Having gone through the crisis, fiscal and monetary policies in the next period will have to return to normal which is to maintain financial and fiscal discipline.
As a result, the implementation of various policies must strictly take into consideration such issues as it will be an important factor which will impact the assessment of the stability and confidence of the country's economy at the international level.
"To be honest, financial and fiscal discipline must be strictly maintained for the fiscal policy in the next period," said Mr Danucha.
He said Thailand needs to be prepared to absorb shocks which may occur in the case of an economic crisis in major economies, particularly the US and Europe as, if it gets more severe, it would affect the Thai economy.
He added that the country has to build fiscal capability and resiliency to cushion against the global economic crisis and geopolitical conflict, the severity of which is still uncertain.
"We need to maintain strict financial discipline according to the medium-term fiscal plan [which set a budget deficit to not exceed 3% of GDP] as we experience a continuous budget deficit which is not good in terms of international assessment and economic ratings, which demonstrate that we still have not reached a state of fiscal balance," said Mr Danucha.
"We must report actual facts to the new government about the current financial conditions in terms of projected revenues and expenses as well as our budgeting capacity," he said.
Mr Danucha added that the new government needs to prioritise the fostering of exports as it affects the country's industrial and agricultural sectors, with the export value in the first quarter still remaining negative at -4.6%, improving from -7.5% in the fourth quarter last year.
Another issue that the new government must immediately tackle is the wellbeing of the people.
Although private consumption has recently improved, the electricity price continues to rise even though the Ft charge decreased due to a decline in the fuel price.
The measures to be implemented by the new government with regard to the price of electricity is another issue that has attracted public scepticism.
He said the Annual Budget Expenditure Act, which is expected to be effective from Oct 1, may be delayed as the new government cannot be formed in the meantime.
In the worst-case scenario, the fiscal 2024 budget should be approved no later than the first quarter of 2024.
"During this period, the government must maintain a continual disbursement of the expenditure budget as well as a positive atmosphere after the election in order to stimulate the economy and build confidence among foreign investors as well as local investors," said Mr Danucha.
As for the GDP forecast in fiscal 2023, the NESDC projected that the economy will expand in the range of 2.7-3.7%, or an average of 3.2%, which is similar to the forecast in February.
Key supporting factors include the recovery of the tourism sector, the continual expansion of private consumption and the expansion in both private and public investment.
Private consumption expenditure is expected to rise by 3.7% and private and public investment are projected to increase by 1.9% and 2.7%, respectively.
Meanwhile, the export value of goods in US dollar terms is anticipated to decline by 1.6%.
Headline inflation is estimated to be in the range of 2.5-3.5% and the current account is projected to record a surplus of 1.4% of GDP.
