The government will continue to use tax measures to subsidise high energy prices throughout the year to ease people's rising living costs, said Finance Minister Arkhom Termpittayapaisith.
Mr Arkhom made the remarks during his opening speech on Wednesday at the Bangkok Post Forum 2022, "Thailand Ready: Moving onto the Next Chapter", hosted by the Bangkok Post Group.
The one-day event -- where speakers discussed the political, economic and social challenges of post-Covid Thailand -- was held at the World Ballroom, Centara Grand at CentralWorld. Among the 300-strong audience were foreign ambassadors, diplomats, academics and leaders from both state and private sectors. The forum was also livestreamed.
Mr Arkhom said the government's revenue collection in the 2022 fiscal year is expected to exceed its target but in recent months the government has spent any excess revenue on easing domestic oil prices to alleviate people's hardship. The cabinet in July approved an extension of the cut in the excise tax on diesel by 5 baht per litre for another two months, running from July 21 until Sept 20. This followed an earlier approval by the cabinet in May of an extension to the cut until July 20.
The government decided in February to cut the tax by 3 baht per litre, down from 5.99 baht per litre, from Feb 18 to May 20.
The finance and energy ministries are considering another tax measure to manage the price of energy for the next couple of months. But the measures will be targeted for the benefit of those people who are vulnerable, Mr Arkhom said. Once the economy is healthier, these kinds of short-term measures will gradually be reduced and replaced by mid-term measures, he said.
Mr Arkhom expects inflation will peak in the third quarter of this year and said he expects an average inflation rate of 6% this year. The Bank of Thailand recently raised its policy rate to tame persistently high inflation.
He added the government's expenditure budget of 3.18 trillion baht for the 2023 fiscal year will also play a key role in reviving growth. The budget spending will begin on Oct 1.
The budget has a deficit of 695 billion baht, down by 5 billion baht from the previous year, suggesting the government is maintaining fiscal discipline. The budget is higher than the previous year by 85 billion baht, indicating the government is using an expansionary budget policy to further drive growth.
Mr Arkhom said the ratio of public debt to the GDP was 60.75% in July, which is still lower than the ceiling of 70%. As part of efforts to drive the country forward, the government also has focused on promoting the Bio Circular Green Economic Model (BCG).
