Thai Public Finance: Can Thailand Afford Another Political Crisis?

In this report, RGE Monitor lays out its forecasts for Thailand’s budget balance, public debt (including that of state-owned enterprises), and bonds.

The full text of the report, complete with charts, is available only to subscribers: Thai Public Finance: Can Thailand Afford Another Political Crisis?

Introduction

Thai government officials may be in for some nasty surprises this year from the budget and debt department. Political instability has taken its toll on Thailand’s public finance, with the budget in deficit since the 2006 coup that deposed Thaksin Shinawatra. Frequent regime changes have disrupted domestic public and private spending and investment. As the world economy tips into recession, Thailand’s last engine of economic growth – external demand – will sputter out too. Public officials are making last-ditch efforts to pull the economy out of its nosedive into a recession. However, they may have to spend more than they expected and collect less tax revenue than they hoped. Meanwhile, instability will continue to gnaw away at the country’s hard-earned fiscal recuperation from the 1997/8 Asian financial crisis as political tensions simmer.

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