Govt eyes B200bn of borrowing
Somkid wants major boost for economy
The government is considering issuing an executive decree to allow it to borrow around 200 billion baht to implement a big economic stimulus package to counteract disruption caused by the Covid19 pandemic.
Deputy Prime Minister Somkid Jatusripitak said yesterday that the government will have to enact a decree on borrowing to implement stimulus measures with a focus on local and regional economic development.
He said the proposed stimulus package, the third in a series following the outbreak of the novel coronavirus, will follow the sufficiency economy model by creating jobs in local communities to strengthen the grassroots economy.
Mr Somkid said the funds will have to be “big” while insisting that the country’s fiscal health is sound and the Finance Ministry is working on the new funding plan. “I think we need to spend money to support the economy and solve the drought problem. We need to figure out how much and the Finance Ministry is working on it,” Mr Somkid said after a meeting with senior officials from the Finance Ministry, the Bank of Thailand, the Securities and Exchange Commission and executives of commercial banks.
“The size of the fund isn’t the limitation. What’s important is what we are going to do with the new fund. We don’t want to spend it in an unorganised way and on projects where the benefits won’t last,” he said.
He said the government cannot simply transfer the budgets of ministries to the Budget Bureau to spend on stimulating the economy. To do so, a law must be enacted.
According to Mr Somkid, as people return to their home provinces as a result of the Covid-19 pandemic which has adversely hit a wide range of business, the government would seize the opportunity to implement the stimulus scheme and push for local economic development.
“We want to turn this crisis into an opportunity to strengthen the local and regional economy. Our weakness is that we lean too much on other countries.
We are weak inside,” he said.
State-owned PTT Plc is expected to help in the distribution by providing space for local products at its filling stations scattered across the country, he said.
According to Mr Somkid, the 1997 “Tom Yum Kung” crisis caused the Thai economy to plunge, but the financial crisis hurt the wealthy rather than the poor.
However, the impacts of Covid-19 are being felt across the board and the outbreak poses a serious risk of sending many countries into recession.
“So it is important that we know what we will do for the future. The global economy is in the red. The IMF is offering to help the entire world,” he said.
Finance Minister Uttama Savanayana said yesterday the size of borrowing depends on the objectives of the stimulus scheme.
“If we leave the economy as it is without giving it a boost, we don’t know when it will pick up after the situation improves,” he said.
When asked if the borrowing would be around 200 billion baht, he said: “In principle, we can.”
The planned stimulus package will be the third in the series.
In the second phase, those affected by the Covid-19 outbreak will be able to access a 50-billion-baht government fund which provides 5,000 baht per month for three months to 3 million virus-affected temporary employees and self-employed workers. The registration will start today from 6pm.
The first phase covered a broad range of financial and fiscal relief measures to help companies, especially small and medium-sized enterprises, alleviate negative impacts from the Covid19 crisis.