February 7, 2020 / 11:04 AM / 12 days ago

Thai court rules delayed $103 billion budget bill valid

BANGKOK (Reuters) - Thailand’s Constitutional Court ruled on Friday that a delayed $103 billion budget bill for the current fiscal year was valid, giving the go-ahead for spending plans aimed at reviving the flagging economy.

A majority of the court voted that the bill was valid, but it will need a new parliamentary vote on the second and third readings within 30 days, it said in a statement.

The court said there was an urgent need for the bill to help resolve delays and obstacles in budget disbursement.

The bill will then need a vote in the senate and the king’s endorsement before coming into effect.

The proposed budget - delayed since Oct. 1 when the fiscal year began - foresees a 7% rise in overall spending to 3.2 trillion baht ($103 billion). It projects a deficit of 469 billion baht, up 4.2% from the 2019 fiscal year.

Some lawmakers had sought a ruling from the court after the discovery of an irregularity during the parliamentary vote that passed the bill in January. A lawmaker’s voting card was used when the lawmaker was not present

The budget delay is among key factors for the central bank’s cut in its policy interest rate to a record low of 1.0% on Wednesday. The central bank said growth this year would be less than it previously forecast.

On Thursday, Deputy Prime Minister Somkid Jatusripitak said that if the budget bill was effective, spending should start in May, at the earliest.

He said the government was ready to borrow or launch an infrastructure fund to finance investment projects if needed.

Finance Minister Uttama Savanayana said there was fiscal policy space to use as appropriate to support the economy.

Southeast Asia’s second-largest economy has lagged most of the region for years, as its exports have been hit by global trade tensions and investment has remained sluggish.

($1 = 31.16 baht)

Editing by Giles Elgood

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