Mr Louis Chua, a Member of Parliament ( MP ) for Sengkang GRC, suggested that “ethical lending practices” should be encouraged, apart from raising awareness of the dangers of illicit borrowing. Stringent regulations on all types of financing, perhaps from licensed moneylenders and banks, to avoid “exorbitant attention rates” andContinue Reading
According to former prime minister Abhisit Vejjajiva, the country’s economy has slowed down and cannot be saved by just injecting wealth through initiatives like the government’s 500 billion-baht modern money handout plan, which will likely help boost the economy in just one or two quarters.
Mr. Abhisit also cited the urgency of amending laws in a particular meeting with the Bangkok Post as a solution for the country’s economic stagnation.
According to Mr. Abhisit, who rated Mr. Srettha’s effort to entice more foreign firms into Thailand as unsuccessful as it should have been, these legal difficulties are a significant obstacle to Prime Minister Srettha Thavisin’s efforts to do so.
Mr. Abhisit made reference to Mr. Srettha’s sessions with important businesspeople while traveling abroad.
Purchase problems
Global investors are primarily concerned about Thailand’s lack of laws, rules, and technology, especially now that the government has n’t but demonstrated clearly what fresh business direction Thailand is actually moving in, according to Mr. Abhisit.
Worse still, in wooing purchases from abroad, the Srettha leadership is focusing more on business sectors with little progress, said Mr Abhisit.
This state is attempting to address this key fundamental issue by introducing the online budget handout scheme and raising the minimum everyday wage to 400 baht, according to Mr. Abhisit, along with higher purchasing power only among a select few small groups of Thai consumers and a higher rate of household debt.
He cited Microsoft executives ‘ absence of the precise purchase figures the tech company had in mind when they made the announcement of their investment strategy in Thailand recently as one obvious example.
He claimed that while they have released their purchase plans for Thailand and Indonesia, they have left out their own investment plans.
He claimed that if Microsoft had actually intended to set up a data center in Thailand, it would have made clear what portion of the company’s guaranteed investment’s clean electricity use would need to be met.
According to Mr. Abhisit,” And we still do n’t have the answers to the questions that prospective international investors have raised regarding clean energy policies that will ensure the continuity of business development.”
Every business needs help
According to Mr. Abhisit, Thailand’s economic growth is typically attributed to the rise of large public companies, but in reality only those with concessions from the authorities are expanding, according to Mr. Abhisit.
This plainly shows Thailand’s financial growth happens in just specific firms, not across all business areas as it should be, he said.
He said,” The answer is that we need to start rewriting laws and regulations that have been debated for a while.”
Also Thai businesses find Thai rules difficult due to their complex laws. These regulations are outdated and inconsistent with current businesses, innovative technology and the economic system”, Mr Abhisit said.
According to Mr. Abhisit, yet the government’s plan to raise the minimum daily wage to 400 baht still needs constitutional amendments, adding that any additional delays in passing the laws may probably lead to an even worsening of the economy going into the new year.
” Up until now, we still have n’t seen the government making any real move in implementing those policies it had promised voters]during the election campaign] while pressure is mounting for it to honour its promises”, he said.
According to Mr. Abhisit, the ruling Pheu Thai Party and its precursor, the now-defunct Thai Rak Thai Party, were well known for their propensity to choose a quick repair, such as a signal program to finance an economic system, rather than addressing a root cause.
He predicted that the business will fail once more in one or two quarters once the effects of the short-term monetary stimulus are gone.
According to Mr. Abhisit, the alliance government’s efforts to boost the economy even lack unity.
New financial plans
The ruling party has generally maintained that the nation is experiencing economic slowdown and that the digital wallet freebies are intended to bring the country back from its slumber, according to deputy finance minister Paopoom Rojanasakul’s earlier statement to the Bangkok Post.
Mr. Paopoom attributed the slow economy to three factors: the inaction of the 2024 fiscal budget, ineffective fiscal and monetary measures to stimulate the economy, declining consumer confidence in spending, and a contraction in loans, particularly for small and medium-sized enterprises ( SMEs ).
” In brief, the fiscal business lacks weapons, and while the financial market has it, it refuses to use it. Banks are optimistic about extending money as a result of this. With all these factors, the government’s business is sluggish”, he said.
Mr. Srettha stated on Friday that the government would introduce extra steps to boost the economy.
He claimed he had a Thursday evening meeting with Finance Minister Pichai Chunhavajira about a variety of issues, including property market and economic stimuli.
” A major announcement on quick- term, medium- term and lengthy- term measures may be made on June 24 or 25″, the excellent minister said.
Asked if this would be good news, Mr Srettha said:” Let’s wait and see”.
He also said Mr Pichai will discuss the inflation target with Bank of Thailand ( BoT ) governor Sethaput Suthiwartnarueput.
Prior to this, Mr. Srettha stated that numerous foreigners were interested in funding projects in Thailand, including the” Land Bridge.”
This one trillion-baht project aims to build a logistics network connecting Chumphon province in the Gulf of Thailand to Ranong province along the Andaman Sea.
Additionally, it has two deep-water ports, a railroad system, and a land-to-air highway connecting the two provinces, with the intention of loading containers onto waiting container ships.
After the release of the federal budget, financial experts predict that the situation will bottom out in the next half of the month. However, the market is currently at one of its worst points.
According to Nonarit Bisonyabut, an economist at the Thailand Development Research Institute ( TDRI), things typically seem to be at their worst just before things start to improve.
Mr. Nonarit attributed a short-term decline in the country’s economy to a number of factors, most notably the slow funding of the federal budget and great domestic and international interest rates, which discourage investment.
Politics a probable move
He claimed, however, that as interest rates drop globally, the position will increase. Interest rates were just lowered by the European Central Bank, and the US is projected to experience another reduction this season.
” I’m calling it the’ 4am business’ because we’ll view a ray of light immediately. We’ve seen lower interest rates, he said, with Thailand likely to follow suit and the US expected to make four cuts next month.
Mr. Nonarit stated that as soon as the details of government jobs are made clear, state spending may start in May and may continue to increase. The trade industry, however, is showing signs of improvement, and so is the global market.
” That means we’ll be entering the sun, and the sector is expected to start growing again”, he said.
But, a nation’s economic growth depends heavily on its ability to meet the needs of the world’s economy and address challenges brought on by an aging society.
Also, the state of politics is also retard the economic treatment, particularly if Prime Minister Srettha Thavisin is removed from office, causing social problems.
In the most recent cabinet reshuffle, Pichit Chuenban was criticized for his controversial appointment as the PM’s Office secretary. 40 lawmakers, who had accused the prime minister and Pichit of breaking government minister morals, started the investigation.
They asked the court if the pair should be removed from office under Section 160 ( 4 ) and ( 5 ) of the constitution, which deals with the ethics of cabinet ministers.
They claimed that Pichit, who had represented Thaksin Shinawatra in a corruption case in 2008 and spent time in jail for contempt of court, was inadequate to hold a cupboard position.
The social climate also affects the business. If the land has to find a new prime minister, state laws will be further delayed”, Mr Nonarit said.
Nonarit: Politics may trick recovery
Digital pocket the main concern
The TDRI researcher asked whether the Pheu Thai-led administration’s policies over the past nine months have had an impact on the economy, noting that the government is focusing more on the digital budget plan than other small-scale monetary measures.
” The state has to save money for the cash handout program, so there are no smaller initiatives to wax the rims”, he said.
There remains a major question mark over foreign assets, he said. Although some major companies claim they intend to travel to Thailand, it is too early to say whether the prime minister’s outside journeys will have any impact.
” There are basic factors that may pull investments, such as human resources and skill set. He claimed that this is the major challenge, and that long-term planning is required to handle this.
According to Mr. Nonarit, the government should take short-term steps and begin addressing economic reforms, particularly building the workforce to support the business, once political uncertainty has vanished and social security has been established.
Weak imports, lower paying
Tanit Sorat, vice- chairman of the Employers ‘ Confederation of Thai Trade and Industry ( EconThai ), said the export sector, which is traditionally Thailand’s driving force, remains weak, so supply chains have been affected.
Due to the low purchasing power of local and international markets, the industrial firm’s production accounts for 60 % of its full potential.
As a result, the services, logistics, employment and transport industries are all suffering from this downturn of financial activity.
The circumstance for companies has become worse as a result of global factors, including the US-China trade war and the Middle East’s tensions, particularly those involving shipping vessels in the Red Sea.
A high level of household debt has caused a negative situation for companies and raised cash concerns for businesses as a result of poor customer spending.
” Only the tourism industry seems to be surviving, but the sector makes up for 8 % of the country’s GDP”, he said.
On international investments, he said businesses make lengthy- term expense plans, which are not likely to be halted only by social issues.
Last year saw investment principles of more than 600 billion rmb, of which 70 % was the result of foreign direct investment.
Government” sitting on its arms”
In the past nine times, Mr. Tanit claimed that the government has hardly done something. The government chose to wait for the electronic wallet system rather than start a signal program to increase profitability and start a bill suspension.
The prime minister should have started working right away because he is a businessman. He is aware that businesses require small incentives and debt payment suspensions to keep up with rising household debt. He thinks like a politician, not a businessman”, he said.
He noted that the car manufacturers ‘ supply chain has experienced a 23 % contraction, and that other struggling industries include sugar, cassava, and rubber.
Half of export clusters have also contracted, and without government intervention, the supply chain will be dragged down, he noted.
The government should develop a plan to increase public spending and increase production while the rollout of the digital wallet is in progress. Operating at 50–60 % of their total capacity, businesses will not be able to retain workers, he said.
” Can the government also suspend debt for a year?” This is a short- term measure. And for the digital wallet, the government should ensure it can be spent anywhere, not just in convenience stores”, he said.
Tanit: Export sector remains weak
The ruling party, according to deputy finance minister Paopoom Rojanasakul, has always said that the nation is experiencing economic stagnation and that the digital wallet handouts are intended to lift it from its slumber.
Mr. Paopoom attributed the slow economy to three factors: the inaction of the 2024 fiscal budget, ineffective fiscal and monetary measures to stimulate the economy, declining consumer confidence in spending, and contraction in loans, particularly for small and medium-sized enterprises ( SMEs ).
” In short, the fiscal sector lacks ammunition, and while the monetary sector has it, it refuses to use it. Banks are cautious about extending loans as a result of this. With all these elements, the country’s economy is sluggish”, he said.
State funds begin to flow.
Mr. Paopoom claimed that funds have been injected into the system since the 2024 fiscal budget bill was finally approved after a protracted delay.
Additionally, measures are now in place to accelerate investments in state enterprises which meet 95 % of the government’s target.
More money will be injected into the system as a result of the rollout of the digital wallet scheme, which is scheduled to take effect in October of this year.
The deputy finance minister claimed that due to the slow production and lack of consumption, Thailand has lost its appeal.
He acknowledged that business decision-making depends also on political stability. He expressed confidence in the government’s efforts to solve the country’s economic problems and the introduction of a number of fiscal measures, including soft loans, as well as upcoming loan guarantee measures.
Central bank must play a role
He argued that the Bank of Thailand must cooperate with the government in order to carry out its measures, and he also emphasized the necessity of interest rate reductions.
We have remained unwavering about the necessity of lowering interest rates because they do not conform to the economic conditions. Interest rates appear higher than they should be with the current inflation rate of 0.6 % to 0.7 %, which is below the lower 1 % threshold.
Mr. Paopoom added that much-needed reforms like the Virtual Bank project, credit guarantee upgrades, and the retirement lottery policy are in the works and that the economy is on track to recover, particularly in the second half of this year.
Paopoom: Banks cautious about extending loans
PUBLISHED: 23 Jun 2024 at 04: 00
The 3.75- trillion- bass budget bill for the 2025 fiscal time sailed through its first studying in the House of Representatives on Friday night with 311 votes of support, 175 against and two abstentions.
A 72-member special House committee with people from the government and opposition parties was established to review the legislation. 18 of the members of the committee are cabinet members and 54 are criticism and government representatives. It will keep its second meeting tomorrow, and it has 30 days to finish its function.
Deputy Prime Minister and Commerce Minister Phumtham Wechayachai thanked the Members for their suggestions during the three-day discussion and urged the particular House committee to take their suggestions into account as it moves forward with its tasks.
He claimed that the government would make sure that the limited budget was effectively used and in the public’s best interest, noting that the government’s 2025 fiscal year’s spending plan was intended to promote financial growth.
Pita Limjaroenrat, the head of the Move Forward Party ( MFP), presented the government with a five-point proposal that included a detailed plan for revenue collection, debt management, tax reform, and a transparent budget-making process.
He suggested that the people should be encouraged to observe the work to ensure accountability and transparency and that the chair of the unique House committee overseeing the budget bill is usually a authorities representative.
On May 28, the government approved a budget fair 3.75 trillion ringgit for the 2025 fiscal year, which will launch on Oct 1 and ending on Sept 30 next month.
The spending may be financed by 2.88 trillion baht of tax revenue and a payment to make up for the estimated 865 billion baht of budget deficit for the fiscal year 2025.
Some 152.7 billion ringgit of the funds is earmarked to finance the president’s 500- billion- bass digital wallet handout.
According to the government, although the deficit is higher this year, 908 billion baht is set aside for investment, representing a 27.9 % increase from the 2024 fiscal year.
How To Make Millions Before Grandma Dies details on general interfamilial issues almost anyone can connect to, such as sibling conflict, favouritism, and decisions about who’s more paternal or effective.
M’s oldest brother, who has a small supermarket job and lives far away with his wife and young child, has to pay for both his wealthy home and his daughter’s worldwide education, and his youngest uncle, who is also unemployed and deeply in debt.
Particularly when elderly relatives become extremely sick and require assistance with daily tasks like showering or regular hospital visits, the tension between filial piety and individual commitments is exposed.
As M’s calmly sarcastic cousin Mui points out, what older people need most, is what their children the n’t provide them- period.
It’s something that Singapore’s hamburger technology, generally aged between 35 and 59, relate to as they balance caring for their children and ageing parents, while holding down jobs, keeping their homes in order, carving out time for self- attention and maintaining some semblance of a social life.
The film also makes a point of considering the best course of action for ailing parents when deciding between the problems older children experience and the potential for dispute among siblings.
May the elder be kept informed or protected from certain difficult truths like how many months or weeks of life they have left? Are they better off age in spot, moving into a friend’s house ( if therefore, which one? ), or being confined to a nursing home?  ,
The film serves as the ideal starting point for discussion of these crucial issues with your family. More importantly, it’s a warning that old folks price period with their older children and their children. And since grandchildren have more time than their wedged parents, Gen Z might want to step up and stop using their computers and mobile phones.  ,
BoT speaks to continue despite column.
Prime Minister Srettha Thavisin announced on Friday that the government would introduce extra measures to boost the slow business next year.
He claimed he had a Thursday evening meeting with Finance Minister Pichai Chunhavajira about issues like the stock market and economic impulses.
” A major announcement on brief- term, medium- term and lengthy- term measures may be made on June 24 or 25″, the excellent minister said.
Asked if this will be excellent information, Mr Srettha said: ” Come wait and see.’ ‘
He also said Mr Pichai will discuss the inflation target with Bank of Thailand ( BoT ) governor Sethaput Suthiwartnarueput.
Mr. Srettha said the discussions are aimed at resolving their differences and that the state should respond if the BoT governor disagrees with its efforts to change the inflation target.
The prime minister said,” It is the duty of Mr. Pichai,” adding that changing inflation target is just one of the many ways to boost the business.
The prime minister requesting a price split to boost the economy has been at odds with the central bank for decades over interest rates.
However, the BoT held its key interest rate low at 2.50 % following a assessment earlier this month. On August 21, there will be a charge review.
In May, when Mr Pichai assumed office, he said he would look again at the 1 % to 3 % inflation target with the central bank.
Interest charges and the inflation target are now at appropriate levels, according to the central bank’s previous statement.
The monthly inflation rate for May was 1.54 %.
The renewed discussions come amid social doubt that has rattled markets as judges hear a number of pressing matters, including one that calls for the removal of the prime minister and forppointing questionable politician Pichit Chuenban as a secretary of the PM’s business.
However, the opposition Democrat Party on Friday  , took aim at the government’s budget costs for the fiscal 2025 during a debate in parliament.
Romtham Khamnurak, a Democrat MP for Phatthalung, said the budget seeks to use to finance the government’s electronic- wallet handouts, which would impose more debt on the country.
The fiscal 2025 budget includes a deficit of about 865 billion baht, up 24.9 % from the figure earmarked for 2024.
He predicted that the government will need to use money to cover the gap and nearly reach the legal maximum.
He added that total public debt tallied 11.3 trillion baht, equivalent to 62.5 % of GDP, as of February and the figure is expected to climb to 70 % in the coming months.
Under the 2025 resources, normal consumption amounts to 2.7 trillion ringgit, compared to an estimated income of 2.88 trillion baht the government expects to obtain.
” That’s why the government has to come up with the budget deficit and try to borrow”, Mr Romtham said.
He added that the 805 billion bass key fund should be set aside just for emergency expenses.
However, he claimed that the government now intends to use the main fund’s 152.7 billion to fund its electric wallet scheme.
Despite warnings about possible financial challenges, the state is attempting to pass the plan, according to Mr. Romtham.
On May 28, the government approved a budget costs for 3.75 trillion baht for the 2025 fiscal year, starting Oct 1 and ending Sept 30 next month.
Some 152.7 billion ringgit was earmarked to finance the president’s 500- billion- baht modern money handout.
A proposal to use 122 billion baht from the 2024 fiscal budget for the same purpose was also approved by the cabinet.
As of press time yesterday, parliament had not yet begun voting on the 2025 budget bill. The three- day debate on the goverment’s spending plan began on Wednesday morning.
WASHINGTON – The most disturbing thing about forecasts that the US national debt will hit $50 trillion by 2034 is that the true figure surely will be much bigger.
The Congressional Budget Office noted that the federal debt will hit 122% of gross domestic product a decade from now, dwarfing America’s fiscal position after World War II. Funding the biggest drivers – defense, social safety net outlays and giant tax cuts unmatched by revenue increases – will only become costlier over time. Never mind if a deep recession or serious military conflict further alters this trajectory.
This slow-motion economic disaster could be sped up by political squabbling or by de-dollarization efforts among top emerging markets.
Case in point: the November 5 US election. Even if Donald Trump loses to current President Joe Biden, there’s a zero-percent chance the former US leader and his army of supporters go away quietly. The risk of a Capitol Hill insurrection 2.0 looms large. The earlier one, on Jan. 6, 2021, provoked Fitch Ratings to revoke Washington’s AAA rating. Might the next prod Moody’s Investors Service to yank away the last AAA?
Nor are Biden’s China tariffs buttressing global faith in the dollar or US Treasury securities, of which Beijing holds nearly US$700 billion. Those tariffs include a 100% tax on China-made electric vehicles.
Such moves won’t prod Detroit to make the better automobiles that consumers in Europe, Asia or even many Americans want. They won’t raise America’s innovative game. They won’t increase Chinese leader Xi Jinping’s desire to work with Washington on climate change, military-to-military communications, counternarcotics, AI-related risks or even just basic economic cooperation.
Biden has intensified Washington’s sharp mercantilist pivot since 2017. Then-President Trump slapped huge tariffs on Chinese goods and on global steel and aluminum. When Biden arrived, he left Trump’s trade war in place — and continued to add new layers of China-targeted curbs.
Now, as Trump threatens 60% tariffs on all Chinese goods, Biden is trying to out-do Trump. This trade-tax arms race is drawing retaliation threats from Xi’s government. It also has Global South countries viewing the US less and less as an adult in room when it comes to economic and geopolitical affairs.
The most obvious example of disillusionment over US fiscal excesses is the pivot away from the US dollar. The predicament is made worse by the bull market in political polarization in the halls of Washington power as the US debt hits $35 trillion.
“The current fiscal trajectory could eventually push the debt-to-GDP ratio to a point where stabilizing it would require a fiscal surplus of a size that has rarely been sustained historically,” says economist Manuel Abecasis at Goldman Sachs. “And while the conditions for a fiscal consolidation to succeed are currently in place in the US, there is little political momentum for deficit reduction.”
Abecasis adds that “the outlook for US fiscal sustainability has become more challenging over the last five years. Higher expected future interest rates in particular have substantially worsened the trajectories of the debt-to-GDP ratio and of real interest expense as a share of gross domestic product.”
Goldman’s economics team reckons that the US debt-to-GDP ratio will hit 130% by 2034 from 98% now – fully 8 percentage points higher than the CBO estimates. But could it end up being far higher than that?
In a June 18 op-ed for the Free Press news site, historian Niall Ferguson views America’s debt trajectory through a variety of financial prisms, both past and present. Most interestingly, he considers parallels between the collapse of the Soviet Union and the hubristic belief in Washington that titanically huge deficits don’t matter.
As Ferguson writes: “A chronic ‘soft budget constraint’ in the public sector, which was a key weakness of the Soviet system? I see a version of that in the US deficits forecast by the Congressional Budget Office to exceed 5% of GDP for the foreseeable future, and to rise inexorably to 8.5% by 2054. The insertion of the central government into the investment decision-making process? I see that, too, despite the hype around the Biden administration’s ‘industrial policy.’”
Economists, Ferguson explains, “keep promising us a productivity miracle from information technology, most recently artificial intelligence. But the annual average growth rate of productivity in the US non-farm business sector has been stuck at just 1.5% since 2007, only marginally better than the dismal years 1973–1980.”
At present, he says, “the US economy might be the envy of the rest of the world today, but recall how American experts overrated the Soviet economy in the 1970s and 1980s.”
As the CBO admits, the share of GDP going toward interest payments on the federal debt will increase to twice the amount Washington spends on national security by 2041. That’s partly thanks to the rising cost of the debt squeezing defense spending down from 3% GDP, now to a closer to 2.3%, 30 years from now.
“This decline,” Ferguson says, “makes no sense at a time when the threats posed by the new Chinese-led axis are manifestly growing. Even more striking to me are the political, social and cultural resemblances I detect between the US and the USSR. Gerontocratic leadership was one of the hallmarks of late Soviet leadership, personified by the senility of Leonid Brezhnev, Yuri Andropov and Konstantin Chernenko.”
By today’s US standards, the later Soviet leaders weren’t so old, Ferguson argues. Nor was the Soviet population, by some measures, appreciably less healthy than Americans today, he says. “The recent data on American mortality are shocking,” Ferguson says.
Life expectancy, he notes, “has declined in the past decade in a way we do not see in comparable developed countries.” He cites, too, a “striking increase” in deaths “due to drug overdoses, alcohol abuse, and suicide, and a rise in various diseases associated with obesity.”
The credit rating of the globe’s biggest economy – and printer of the reserve currency – don’t normally turn on such considerations. But, as Fergison argues, America is on a dangerous financial and socioeconomic course that few saw coming just a few years ago.
“I still cling to the hope that we can avoid losing Cold War II – that the economic, demographic and social pathologies that afflict all one-party communist regimes will ultimately doom Xi’s ‘China Dream,’” Ferguson says.
But, Ferguson adds, “the higher the toll rises of deaths of despair – and the wider the gap grows between America’s [elite] and everyone else – the less confident I feel that our own homegrown pathologies will be slower-acting. Are we the Soviets? Look around you.”
In the short run, the Federal Reserve’s reluctance to cut rates is prolonging the “higher for longer” era for US yields.
“The harmful effects of higher interest rates fueling higher interest costs on a huge existing debt load are continuing, and leading to additional borrowing,” says Michael A Peterson, CEO of the Peter G Peterson Foundation. “It’s the definition of unsustainable.”
Nassim Nicholas Taleb is even more worried. The author of the 2007 best seller The Black Swan: The Impact of the Highly Improbable thinks that a US debt “spiral,” coupled with political dysfunction in Washington, is a “white swan” risk in plain sight that could cost Washington its last AAA credit rating.
“The risk is right in front of us,” Taleb says. “If you see a fragile bridge, you know it’s going to collapse at some point.” Taleb adds that “a debt spiral is like a death spiral. We need something to come in from the outside, or maybe some kind of miracle.”
Last November, Moody’s Investors Service warned it might yank away America’s only remaining top rating. That came three months after Fitch Ratings downgraded the US to AA+ as Republicans and Democrats brawled over funding the government. And 12 years after a Standard & Poor’s downgrade amid partisan bickering over the debt ceiling.
“So long as you have Congress keep extending the debt limit and doing deals because they’re afraid of the consequences of doing the right thing,” Taleb says, “you’re going to have a debt spiral.”
As US political polarization hits a fever pitch, there seems little scope for a pivot toward fiscal sobriety. As Biden runs for reelection, his Democratic Party has zero plans for debt reduction. Nor do Republicans loyal to Trump, who are telegraphing giant new tax cuts.
“This makes me kind of gloomy about the entire political system in the Western world,” Taleb explains.
Former US Treasury Secretary Robert Rubin warns that fiscal challenges put the economy in a “terrible place.” Rubin tells Bloomberg that “the risks are enormous and some of them are materializing already, like higher interest rates.”
Rubin earned his fiscal bona fides in the early 1990s. Back then, as President Bill Clinton’s economic czar, Rubin struck a deal with the Fed: debt reduction in exchange for rate cuts. That led to a balanced US budget. Surpluses, too.
Now Rubin worries that the three-percentage-points surge in longer-term US yields is just the beginning. The fiscal outlook has darkened and inflation remains elevated. Rubin cautions that when markets are “out of sync with reality,” things “correct savagely.”
Sadly, the political climate on Capitol Hill leaves little reason for hope lawmakers can head off catastrophe.
“Looking forward, we’re having to deal with both spending and taxes,” Rubin notes. But “when you get realistic about it, I think you’re going to have to” focus largely on the tax side to increase revenues.
As Rubin sees it, “there’s a lot of talk, but the talk is always divided politically between the Republicans, who refuse to raise taxes, and the Democrats, who won’t do entitlements.” His conclusion about Congress or the White House tackling the deficit is that “I wouldn’t bet on it.”
Nor is it safe to bet on the US debt only rising to $50 trillion a decade from now. As the real figure exceeds even the worst expectations, global markets could be in a world of hurt. And Washington will make it easy for Global South nations hoping to sideline the dollar.
PM stands by modern bag, despite value
As the House of Representatives squatted its three-day conversation, Prime Minister Srettha Thavisin presented the 3.75 trillion-baht resources costs for the 2025 fiscal year with a plan to jump-start Thailand’s weak economy.
According to Mr. Srettha, the funds aims to aid the country’s market in reaching its full potential. The economy is expected to grow 2.5 % to 3.5 % in 2025, with inflation projected at 0.7 % to 1.7 %, he said.
Mr. Srettha expressed confidence in the third quarter earlier this month, but the government is now focusing on how to boost economic development in the second quarter.
He told the House the state recently launched its” Burn Thailand ‘ ‘ perspective for the nation that aims to leverage its strengths to come as a regional hub in eight key sectors: aviation, tourism, wellness and health, agriculture and food, logistics, potential mobility, digital economy and finance.
This perception may function as a guide for 2025 resources saving control, the prime minister said.
However, he noted that the world economy still faces restrictions and risk factors brought on by trade protectionionism and geopolitical tensions, which could be detrimental.
Additionally, Mr. Srettha assured that 50 million qualified people would receive 10, 000 baht as planned for the government’s designed digital wallet program in the final quarter of the year.
The “digital budget scheme” may trigger financial whirlwinds to boost the country’s economy from the ground up.
” It will drive spending, generation, and work, which in turn will provide tax revenues to the government to invest in projects to improve the country’s competitiveness”, Mr Srettha said.
The 2025 budget’s funding comes from an estimated 2.88 trillion baht of tax revenue and a payment to make up for the estimated 865 billion baht of budget deficit designated for the 2025 fiscal year.
Even though the budget deficit is higher than the current fiscal year’s, the government has set aside 908 billion baht for investment, representing 24.2 % of the total budget and a 27.9 % increase from the 2024 fiscal year, he said.
The first three months saw economic growth of 1.5 % year over year, which was lower than anticipated and surprised some observers.
The NESDC now anticipates a year-long GDP growth rate of between 2 % and 3 %, which is slightly below its previous projection of 2.2 % to 3.2 %. Last year’s growth was 1.9 %.
On May 28, the government approved a budget costs for 3.75 trillion baht for the 2025 fiscal year, starting Oct 1 and ending Sept 30 next month. Some 152.7 billion ringgit was earmarked to finance the president’s 500- billion- baht electronic funds handout scheme. Additionally, a proposal to use 122 billion baht from the fiscal budget for 2024 to finance the scheme was approved by the cabinet.
Of the 122 billion baht, 111 billion baht will come from a budget deficit while the rest will be diverted from the other parts of 2024’s spending, according to the Budget Bureau.
Previously, the government said it also planned to use funds from the Bank for Agriculture and Agricultural Cooperatives ( BAAC ), worth 172 billion, as one of the three main sources of funding. However, getting a loan from the BAAC to finance the scheme will face legal difficulties. According to the law of the BAAC, the bank can only provide financial aid to farmers, which presents a challenge.
During the debate, Chaithawat Tulathon, leader of the opposition Move Forward Party, criticised the budget bill, saying the government’s loan plan to offset the budget deficit of 865 billion baht almost reach the borrowing ceiling allowed by law, with only 5 billion baht that can be borrowed.
He claimed that only about 163 new projects have received budget funding for the 2025 fiscal year, which is less than the budget funds that were allocated in 2024.
Mr. Chaithawat also criticized the ruling Pheu Thai Party’s digital wallet initiative, claiming that the government has been working to promote the project regardless of its potential effects on the economy.
The government plans to draw some 152.7 billion, or about 18.9 % from the 2025 budget’s 805- billion- baht central fund to finance the scheme, he said. The government’s funding decisions to finance the scheme will put the nation at risk of financial issues. The government’s debt repayment burdens will also increase”, Mr Chaithawat said.
The government is trying to spend as little as possible in the current fiscal year, according to Jurin Laksanawisit, a member of the Democrat Party list, to use the rest to fund the wallet scheme.
Opposition leader Chaithawat Tulathon takes to the microphone to criticize the government’s outdated and misguided budget bill. Photos: Chanat Katanyu
Budget discussion live in congress
PUBLISHED: 19 Jun 2024 at 17: 14
As the macroeconomic 2025 Budget Bill discussion arose in parliament on Wednesday, the criticism warned the government of the high financial risk of excessive loans, mainly due to the planned 500 billion baht online income handout.
Criticism and Move Forward Party chief Chaithawat Tulathon said the 3.75- trillion- baht budget tabled in parliament by the excellent minister , included 865- billion- baht in borrowing, which almost reached the borrowing ceiling of the government.
The state would have little room for further loans, just 5 billion baht. Planned borrowing for fiscal 2025 was off 7.8 % on the past year, the biggest increase in 10 years, Mr Chaithawat said.
” If the government needs to make an immediate payment or make a significant investment in the future, the burden on the government will become heavier and the economic room left to the government may shrink,” he said.
The president’s president claimed that because the budget bill included money that was spent on the government’s digital wallet handbook, it posed financial risks. The one-time pay, which came from the president’s contingency fund, was referred to as spending for economic growth and development, he said.
“Economic return may be dependent solely on the growth of short-term consumption,” the statement goes. This investing does not match the regional condition”, Mr Chaithawat said.
” The budget allocation is the riskiest… The’ Ignite Thailand ‘ plan turns out to be Ignore Thailand”, he said.
Jurin Laksanawisit, the leader of the Democratic Party, predicted that the digital wallet initiative would boost public debt. The state reportedly cut spending in governmental 2024 to allow for the digital budget plan.
He claimed that this spending policy may restrict the growth of the gross domestic product this year.
Prime Minister Srettha stated in his introduction that the 2025 expenditure was intended to see the country’s economy grow at its fastest, in line with the government’s plan to” Burn Thailand.”
He claimed that the 10,000-baht digital wallet flyer may reach 50 million recipients later this year and support the economy at the local level.
The nation’s foreign reserves, which were totaling US$ 224.48 billion as of December 31, 2023, were reported by the prime minister as being materially sound.
The 2025 resources included 908.22 billion ringgit in funding, which formed 24.2 % of the total expenditure and was the highest levels substantially in 17 times, Mr Srettha said.
Opposition head Chaithawat Tulathon speaks in the House of Representatives , on Wednesday. ( Photo: Chanat Katanyu )
Due to Asia’s largest economy’s unsteady state, China’s home crisis is once more in the news for all the wrong reasons.
One of the catalysts that helped China become a global superpower was the country’s estate boom. Xi Jinping is currently facing the most difficult problem of his ten years as Chinese president due to the cover slump.
According to data from May, Xi’s inner circle had hoped that the government’s stimulus efforts to date were n’t gaining the support they had hoped. After falling 3 % in April, new home sales decreased by roughly 4 % last month. It’s the worst work for the business in roughly 10 years.  , Property investment , is over 10 % since the start of the time compared to the January- Does period a year ago.
This data additionally supports the property industry’s continued dominance of growth this year, according to Lynn Song, ING Bank’s chief greater China economist, adding that Beijing if “ring some alarm bells.”
The Third Plenum conference scheduled for this month is set to be illuminated by all of this in a better than ever light. This meeting takes place every five times to examine big-picture reform ideas.
The event was actually scheduled for October 2023, but it was postponed due to uncertainty in the physical economy. However, the meet is a fantastic opportunity for Xi to rekindle his reformist momentum and discuss how steps can be taken to stop the property crisis.
At the moment, says Fitch Ratings analyst Brian Coulton, “domestic desire has weakened in China as the , property , industry decline worsens and personal intake growth remains sluggish. However, exports have rebounded, which has helped true GDP, and governmental policy is being relaxed. Negative pressures are, nonetheless, widespread”.
An apostrophe is required for all the engines currently propelling China.
The ultra-long special sovereign bonds Beijing began selling in May have the potential to support the country’s gross domestic product of 1 trillion yuan ($ 138 billion ). The goal is to achieve China’s 5 % yearly growth target by reducing public debt and funding for equipment.
According to scholar Louise Loo at Oxford Economics, “unconvincing onshore action speed outside of the “new” companies in May suggests that the current increase in house and fiscal stimulus has not yet improved buyer and investor sentiment.”
The physical sector, however, is even more questionable, yet if mainland exports are on a break. In spite of the escalating US-China trade tensions, overseas shipments increased by 7.6 % year over year at their fastest rate in more than a year.
According to Tatiana Orlova, an economist at Oxford Economics,” We anticipate that the Chinese trade value recession will provide a valuable tailwind in the battle to bring emerging market inflation back to destination.”
Problem is, the international scene is awash in winds. In the US, the Federal Reserve’s reticence to relieve means the “higher for more” time for provides may persist indefinitely. At the same time as the Bank of Japan is considering a rate increase, Tokyo is avoiding recession once more. Europe is muddling along as Germany stagnates.
What’s urgent is a renewed effort to rebalance growth engines and incentives. Short- term stimulus is plenty needed, as evidenced by the marked downshift in mainland , demand.
Many people anticipate Beijing to increase its efforts since April to encourage businesses and households to upgrade outdated machinery with government subsidies, with an emphasis on automobiles.
” The upcoming implementation of the trade- in replacement scheme will positively impact household and business demand, hopefully inducing demand- led inflation somewhat” , , says Kelvin Lam, an economist at Pantheon Macroeconomics.
The main point will be however, how Xi and Premier Li Qiang’s plans to speed up structural upgrades are to be discussed.
” The Third Plenum may conclude with a pledge of comprehensive reform in areas spanning the private sector, manufacturing, innovation, social security, economic management and more”, says Mark Williams, chief Asia economist at Capital Economics. That may give rise to significant change, but the Party believes that it has engaged in comprehensive reform for the past ten years.
Carlos Casanova, economist at Union Bancaire Privée, adds that “while nobody can know the scope of reforms ahead of time, we expect to see changes to , housing , sector policies. More cities are announcing a complete end to macroprudential restrictions on investment properties. The central government has so far remained silent, suggesting a more formal pivot during the summer. Stay tuned for more”.
That “more” could include Beijing going further than it has to date to help highly indebted property developers, regardless of “moral hazard” risks.
In order to maintain growth at 5 %, Xi’s top priority in 2024 is encouraging consumers to spend more and save less. That entails boosting incomes and creating stronger social safety nets to encourage spending. It implies developing more reliable capital markets so that the typical Chinese can invest in both stocks and bonds, not just real estate.
Until now, Beijing’s extreme focus on juicing consumption time and time again is counterproductive, many economists say. It makes China vulnerable to boom-and-bust cycles that necessitate urgent attention at the expense of reinvigorating the economy. And China’s heavy reliance on exports leaves the economy vulnerable to Washington ‘s , trade- sanction antics.
Part of the strategy is accelerating and broadening China’s evolution as a high- tech powerhouse, development experts agree. And indications are, this is precisely the pivot Xi and Premier Li Qiang are making as 2025 approaches.
Xi’s” Made in , China 2025″ vision has Beijing investing aggressively in making China the dominant power in 5G, electric vehicles, semiconductors, artificial intelligence, renewable energy and other dominant “future” industries.  ,
Yet unless China tends to cracks in its economic foundations, boom- bust cycles will remain a challenge for Xi’s inner circle. Lau notes that a robust increase in domestic demand will require bold actions to address” the current economic malaise” in the real estate sector and rising local government debt levels.
” The , property , sector is a major problem”, says , Wei He,  , economist at Gavekal Dragonomics. Policymakers announced new support measures in the middle of May, but the lack of improvement in daily sales figures suggests that they will almost certainly need to do more to restore consumer confidence.
Odds are, He says, “policymakers may opt to wait, at least for now. They are not complacent about economic growth, as the Politburo’s call in April for more support demonstrated. However, they may not feel any urgency either because real GDP growth is likely running above the full-year target of around 5 %.
To be sure,” that prospect is unwelcome to market participants”, He adds. Equity and commodity markets have slowed since late May, according to the statement from the Politburo meeting, which started in late April.
There are no obvious catalysts for a change in market sentiment until further policy support is found, he asserts, or the upcoming Third Plenum results in an unexpectedly market-friendly outcome. ” Unless the economic data worsen, policymakers may keep markets waiting”.
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