The government will continue to use tax measures to subsidise high energy prices throughout this year, with the aim of easing the high cost of living, Finance Minister Arkhom Termpittayapaisith said on Wednesday.
Mr Arkhom was opening Bangkok Post Forum 2022 "Thailand Ready: Moving onto the Next Chapter" on Wednesday. Speakers discussed the political, economic and social challenges of post-Covid Thailand.
The finance minister said government revenue collection in the 2022 fiscal year is expected to exceed the target. In recent months the government spent this extra revenue easing the domestic oil price to alleviate people's hardship.
The cabinet approved in July an extension of the reduction 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 endorsement by the cabinet in May to extend the cut in the excise tax on diesel by 5 baht per litre until July 20.
The government decided in February to slash 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 jointly considering another tax measures to handle the energy price for the next couples of months. But the measures will be for targeted vulnerable people, Mr Arkhom said.
Once the economy gets healthier these short-term measures will be gradually reduced and be replaced by mid-term measures, he said.
He expects inflation will peak in the third quarter of this year, with averaged inflation of 6% this year. The Bank of Thailand has recently raised its policy rate to tame the persistently high inflation.
He said the government's expenditure budget of 3.18 trillion baht for the 2023 fiscal year will also play a key role in reviving economic expansion. The budget spending will begin on Oct 1 this year.
The budget provides for deficit spending of 695 billion baht, down by 5 billion baht from the previous year, suggesting that the government is maintaining fiscal discipline. The budget is higher than that in the previous year by 85 billion baht, indicating that the government is using expansionary budget policy to further drive economic growth.
Mr Arkhom said that the country's ratio of public debt to GDP was 60.75% in July, which is still lower than the set ceiling of 70%.
As part of the efforts to drive the country to the next chapter, the government has focused on promoting the Bio Circular Green Economic Model (BCG), the minister said.
The government will continue to invest in infrastructure in all areas, not only physical infrastructure, but also investment in human capital and digital technology and innovation.
The government will further create the quality green growth in the economy in all sectors, including the promotion of the electric vehicle (EV) industry which has received tax and non-tax supporting measures, he said.
