The government has not overspent its budget and is trying to reduce the budget deficit to maintain fiscal stability, says Finance Minister Arkhom Termpittayapaisith.
His remark came after comments from some former governors of the Bank of Thailand last week regarding their concern about Thailand's long-standing budget deficit and soaring public debt, which could result in fiscal risk.
Mr Arkhom said the Finance Ministry and central bank coordinate their work.
The ministry is in the process of drafting its fiscal 2023 budget, setting a lower budget deficit, he said.
Mr Arkhom said Thailand is not in stagflation as the economy continues to expand, even as costs rise.
Stagflation refers to a contracting economy in tandem with rising inflation.
However, surging inflation is a concern as rising costs could dampen domestic consumption, he said.
The government needs to undertake revenue reform to increase collections, said Mr Arkhom.
Regarding the private sector's proposal to extend the "Khon La Khreung" co-payment subsidy, he said the scheme is for the short term when people have weak purchasing power.
Once the economy and purchasing power recover, this kind of subsidy should be discontinued, Mr Arkhom said.
The fourth phase of the co-payment scheme runs from Feb 1 to April 30.
Krisada Chinavicharana, the ministry's permanent secretary, said the government has run a budget deficit because Thailand is a developing country and needs to invest heavily in infrastructure to boost economic growth.
He said Thailand routinely runs a budget deficit and only twice in recent decades did it balance the budget. Mr Krisada said the public debt-to-GDP ratio is still manageable and has yet to hit the ceiling level of 70% of GDP. In February, the ratio stood at 60.17%.
