Fiscal deficit to widen

This could also affect the budget for fiscal 2010, which begins on October 1, because the government would have fewer resources to deal with the economic challenges.

In the current budget, the government has planned a deficit of Bt350 billion, including the mid-year Bt100-billion supplementary budget that is due for parliamentary approval soon.

Korn said the government would likely collect slightly more than Bt1.4 trillion in revenue this year, down about 10 per cent from the original target of Bt1.58 trillion.

Somchai Sajjapong, spokesman for the Finance Ministry, said that only Bt76 billion in taxes were collected last month, Bt22 billion under the budget.

The collection in the past three months was 16.1 per cent under target, as the government collected only Bt272 billion, with value-added tax (VAT) and oil excise tax receipts in particular falling short, he said.

The government also received lower profit remittances from state enterprises than last year.

However, the Revenue Department's VAT refunds to the private sector have been higher than the target by Bt16.9 billion, thus helping businesses maintain their liquidity, he said.

Korn and Labour Minister Paitoon Kaewthong presided over the signing of a memorandum of understanding between the Bank for Agriculture and Agricultural Cooperatives (BAAC), Social Security Office and Higher Education Office to help new college graduates and unemployed workers cope with the economic slump.

The joint scheme, funded by a Bt10-billion budget, will cover 250,000 victims in the economic doldrums.

The scheme will help about 100,000 factory workers who have lost their jobs in Bangkok and other provinces. Once they return to their hometowns, they will be re-trained and offered a loan of up to Bt50,000 to start up a small business.

College graduates entering the workforce would also get training and help to start their own business.

About 300,000 new graduates will hit the labour market this year, but about 70 per cent of them will have a hard time finding a job.

The government said BAAC and other state-owned banks would be responsible for approving loan applications, with funds ready to be disbursed in April.

Interest rates on these loans will be favourable at 6-7.25 per cent.

Labour Minister Paitoon said the Social Security Office had allocated Bt4 billion to help finance this scheme, which is designed to tackle joblessness systematically.

The government had prepared Bt6 billion for banks to lend to businesses that wanted to retain their workers, he said. The interest rate on these loans is 5 per cent.

Last quarter, about 600 factories and enterprises closed down, throwing 50,000 people out of work.

This quarter, 200,000 workers would be laid-off. For the whole year, a million jobs could be at risk, Paitoon added.