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Published on September 7, 2007

The government amassed Bt 210.1 billion in revenue in August, rising 7.6 per cent year on year but missing the target by 4.1 per cent, Finance Ministry spokesman Somchai Sujjapongse said yesterday.

Lower profits from private companies and sluggish household consumption have resulted in the shortfall, he said. Consumers are still cautious about buying durable goods such as cars.

Government revenue in the first 11 months of the fiscal year rose 6.3 per cent year on year to Bt1.34 trillion. However, it is off-target by 0.74 per cent.

The appreciation of the baht has affected business performance. Commercial banks also had to increase reserves to comply with the International Accounting Standard 39 imposed by the central bank. These two negative factors have eroded the profitability of corporations.

The Finance Ministry predicts that government revenue for the fiscal year, which ends this month, will surpass the target of Bt1.42 trillion.

The budget deficit is estimated to be Bt25 billion lower than the earlier estimate at Bt146 billion, due to extra income from the dissolution of the Exchange Equalisation Fund. Moreover, the central government's financial subsidy for local governments is expected to be lower than previously planned.

Wichit Chaitrong, The Nation