The Finance Ministry does not want to persist with high spending by state-owned financial institutions as it wants to maintain fiscal discipline, according to finance minister Arkhom Termpittayapaisith.
The cabinet recently approved a temporary increase in the funding ceiling for such institutions, which the government can use to pay for state projects.
The ceiling was expanded to 35% of the country's annual total expenditure, from a previous limit of 30%. The expansion takes effect from now until the end of the 2023 fiscal year in September 2023.
Mr Arkhom said that after the end of the 2023 fiscal year, the ceiling should be returned to the previous rate of 30%.
The minister said he does not want unnecessary use of the so-called quasi-fiscal budget, with spending of this budget now close to reaching the 30% limit.
Section 28 of the State Fiscal and Financial Discipline Act of 2018 allows the government to order state-owned financial institutions to fund projects, like the farmers' income guarantee scheme.
The government sets the budget for paying them back every year. Their funding of the state schemes is not regarded as public debt.
The move is aimed at boosting economic growth, improving people's quality of life, or alleviating the impact of a disaster.
The government plans to run a budget deficit in the short and medium term to support the economic recovery and allow the possible launch of additional measures to handle future pandemic impacts. It aims to curb the budget deficit as a proportion of GDP to no more than 3% over the next five years.
