The Cabinet yesterday preliminarily approved Bt1.63 trillion in fiscal 2008 expenditure - an increase of 4.4 per cent over this year.

The 2008 budget will run an estimated deficit of Bt120 billion. Revenue is projected to be Bt1.51 trillion.

Prime Minister Surayud Chulanont yesterday chaired a special Cabinet meeting. The executive deliberated for 10 hours over expenditure plans.

All ministries were asked to prioritise spending to bring combined requests within the budget framework.

The Cabinet will discuss expenditure again next month.

Government spokesman Yongyuth Mayalarp said all ministries sought a combined Bt2.08 trillion in fiscal 2008 spending - Bt452 billion more than the government's limit.

They will have to drop some projects, adjust amounts sought and tighten spending to meet the budget.

The Bt1.63-trillion 2008 budget is based on projected economic growth of 5 per cent and an inflation rate of 3 per cent.

Of the total, Bt1.16 trillion is earmarked for fixed expenditure - up 2.7 per cent from 2007. Another Bt416 billion is allocated for investment - up 11.3 per cent from this year. Public debt repayment is Bt51 billion - down 6.7 per cent.

National Economic and Social Development Board secretary-general Ampon Kittiampon said government agencies needed to prepare revised spending plans for Budget Bureau consideration ahead of next month's Cabinet meeting.