Thailand: Private investment to spur 2018 growth
THE MINISTRY of Finance expects private investment to lead growth of the Thai economy this year, following 10,411 business operators exercised 1.5-time tax deduction on investment worth about Bt281 billion, an all-time high.
In 2017, Revenue Department launched its tax incentives to promote investment, allowing companies or juristic partnership to deduct its investment expenditure in assets paid in the year by 1.5 times.
Pornchai Thiraveja, finance deputy spokesman, said the amount of private investments last year was much higher than the department’s target of Bt8 billion.
“The amount leads us to expect that private investments will now be the engine of economic expansion in the next periods,” he said.
The 2016 figure was Bt40 billion from 8,834 business operators. About 80 per cent of which were invested in the equipment and machinery sectors.
Out of the Bt281 billion investments in 2017, more than Bt100 billion were invested in machinery and buildings. When combined with investments in equipment, tools and machines, the figure accounted for 80 per cent of the total.
Pornchai said that the Fiscal Policy Office (FPO) was taking into account private investments in its economic forecast for 2017, expecting last year’s economic growth to be higher than its previous estimate of 3.8 per cent.
The FPO will announce 2017 economic figures at the end of this month.
“Now, we have to look at figures in details. Initially, the 3.8 per cent growth target will surely be surpassed. All three economic figures came higher than expected. The private investment climbed 3 per cent, tourism is expected to rise 8 per cent and export growth will likely be at 6 per cent and the 11-month export growth has already exceeded its target,” Pornchai said.
In response to critics on the direct distribution of Bt100 and Bt200 each to low-income earners in the second phase of relief measures, Pornchai explained that the money was intended as diligence allowance for occupational trainning . If they fail to attend, they will not receive the money.
Yanee Sangsrichun, deputy director of the Comptroller General’s Department, said that at the end of the first quarter of the 2018 fiscal year, starting from October 2017, budget disbursement totalled Bt897.768 billion or 31 per cent of the Bt2.9 trillion budget. The disbursed budget was 0.71 per cent higher than targeted.
Of the total, Bt810.586 billion was disbursed for recurring expenditure and amounted to 36.2 per cent of the recurring expenditure budget, 3.2 per cent higher than targeted. The Bt87.182 billion budget was disbursed for investment expenditure and accounted for 15.10 per cent of total investment expenditure budget, 7.01 per cent lower than targeted.
In regard to allowances for disbursements of budgeted items in overlapping fiscal years, Bt69.688 billion was disbursed and accounted for 22.1 per cent. About Bt208.87 billion borrowings had already been made and accounted for 66.1 per cent.