Budget

The Thai parliament passed the nation's annual budget of 3.1 trillion baht for the fiscal year starting October 1 this year. The budget saw cuts in education, defense and the finance ministry as tax revenue comes under pressure from weakening economic outlook. The upcoming fiscal year’s budget is 5.8% lower than the budget of the ongoing fiscal year which sums at 3.29 trillion baht. The government is under intense pressure to revive the COVID-hit economy as anti-government protests intensify. Earlier the central bank has sought an additional 1 trillion baht of fiscal stimulus to combat the dimming economy. However, the finance ministry and the regulator are yet to reach a consensus as the government notes earlier borrowing of 500 billion baht is sufficient. Since the time the country first started its mass inoculation in February 28 this year and as of today approximately 26.8 million of vaccine doses have been administered, covering 19.3% of the country’s population. The number of COVID cases surpassed 1 million last week with 8,826 deaths according to data provided by the ministry of health. Economic data relapsed this morning accounts for a trade surplus of $183.56 million vs. a consensus of $900m. Exports increased 20.27% year-on-year vs. estimation of 19.70% whereas imports increased by 45.94% year-on-year vs. estimation of 40.65%. The ministry expects higher exports given bear weak positioning of the baht and to maintain exports target for 2021 at +4%. The Thai baht tested resistance at 33.38 on the closing of last week and gained strength trading at 33.32 (-0.055) as of this morning. The SET Index leveled off at last week's peak trading at 1572.02 up by 18.99, reflecting optimism on the announcement of the fiscal budget.