LONDON, July 17 (Reuters) - Thailand will maintain loose monetary and fiscal policies in order to support the flagging economy, with a likely increase in next year’s budget deficit, finance minister Sommai Phasee said on Friday.
“Going forward the government will maintain accommodative fiscal and monetary policy,” Sommai said, speaking to investors at an event organised by Asia House in London.
“This coming year, we are voting for 2016 budget ... and deficit will be 2.9 percent of GDP. I am thinking that next year we may have to increase the deficit to maybe reach over 3.5 percent.”
The military junta that seized power last year is struggling to revive the economy after it grew just 0.9 percent in 2014 due to sluggish exports and domestic demand.
This year growth is also being hit by drought and the economy is not expected to grow more than 3 percent.
Sommai said that projection was being supported by a rebound in private consumption and tourism. (Reporting by Sujata Rao; Editing by Louise Ireland)