IMF backs fiscal plan!!!

 

Mitsuhiro Furusawa, Washington-based deputy managing
 director of the International Monetary Fund, says the gigantic
infrastructure megaprojects planned by the government are
 prudent investment. (Photo  by Tawatchai Kemgumnerd)


The government's infrastructure investment plans are not expected
to pose a threat to Thailand's fiscal health, as authorities have
 taken several steps to uphold financial discipline, says the
International Monetary Fund (IMF).

"It is clear that infrastructure is one of the top priorities, not only

 for Thailand but also for many emerging economies, for

sustainable growth.

But to maintain fiscal health is also very important," said Mitsuhiro Furusawa, the IMF's Washington-based deputy managing director,

 in an exclusive interview with the Bangkok Post.

 "After discussion with the [Thai] authorities, I believe they are

 very careful not to incur too much budget deficit or too high a

[public] debt-to-GDP ratio. Those infrastructure projects will be implemented through PPPs [public-private partnerships]."

He is confident the Thai government can maintain a strong

fiscal position while executing public investment projects.

Since the 1997 financial crisis, the Finance Ministry has

adopted a prudential policy by capping public debt at 60%

 of GDP to achieve a sustainable fiscal framework.

 Moreover, it set an internal goal of a 50% ceiling for public

debt before alarming authorities.

The Public Debt Management Office recently estimated

Thailand's public debt would peak at 49.9% of GDP in fiscal 2018

 if private sector joint investment through PPP schemes

accounted for 17% of infrastructure investment.

If the government relies solely on borrowing, public debt will

 peak at 51.2% in fiscal 2018.

 Last week, the cabinet approved a Transport Ministry action plan

 calling for construction worth 1.8 trillion baht in infrastructure

projects to jump-start the economy.

It also clears the way for the ministry to take bids on the first six

 projects worth 186 billion baht as early as this month but no later

than next year's first quarter. Public debt as of Sept 30 amounted

 to 5.78 trillion baht or 43% of GDP.

 During his visit to Bangkok, Mr Furusawa met with Deputy

 Prime Minister Somkid Jatusripitak, Finance Minister Apisak Tantivorawong and Bank of Thailand governor Veerathai

Santiprabhob for a "frank exchange of views" without giving

any policy recommendations to the Thai officials.

The IMF welcomes the monetary policy accommodation adopted

 by the Bank of Thailand and a raft of government stimulus

measures meant to spur short-term economic growth, he said.

 It forecasts Thailand's economic growth will come in at 3.2%

 next year, up from 2.5% projected for this year, with domestic

 political stability, private consumption, the global economic

recovery and strong macroeconomic management in terms

of fiscal and monetary policies as the main drivers of growth,

 Mr Furusawa said.

He said China's economic slowdown and the US Federal

 Reserve's interest rate normalisation were the main external

risks for Thailand and other Asian economies' GDP growth

 outlooks next year.

 Mr Furusawa said greater financial volatility was expected in

 2017 due to divergence in major economies' monetary policy

direction,but economic fundamentals in Asia had strong buffers

 to safeguard against growing volatility.

"This is one of the risks for the global economy, [and] we think

 the authorities of advanced economies should communicate

clearly about their intentions [on policy direction]," he said.

 Other countries should continue to prepare resilient measures

 such as macroeconomic and macroprudential policies in order

 to cushion against any external shocks, Mr Furusawa said.

 In general, Asian countries have mitigated financial risks by

 keeping healthy reserve buffers, sound macroeconomic policy

 frameworks, healthy current account positions and flexible

foreign exchange rates compared with the Asian financial crisis

 in 1997, he said.

News,Transport,Bangkok Post,8 December 2015.

As the International Monetary Fund (IMF) has confident  that

the Thai government can maintain a strong fiscal position

while executing public investment projects,it is the good news

for the next  year economic of Thailand.

 

Also, it forecasts Thailand's economic growth will come in

 at 3.2% next year, up from 2.5% projected for this year,

with domestic political stability, private consumption,

the global economic recovery and strong macroeconomic

 management in terms of fiscal and monetary policies as the

 main drivers of growth.

Hope all this good news with strong strategies implement can

lead to more GDP growth and more income per  head so the

standard living life of the all the people in the country will

be better more than this year.

 

Sincerely Yours.