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Government defends B500bn executive loans decree

Government defends B500bn executive loans decree

THAILAND: Finance Minister Arkhom Termpittayapaisith yesterday (June 9) defended the executive decree to borrow B500 billion to combat the public health crisis, insisting the loan would not exceed the public debt ceiling.

economicsCoronavirusCOVID-19Vaccine
By Bangkok Post

Thursday 10 June 2021, 08:25AM


Finance Minister Arkhom Termpittayapaisith. Photo: Bangkok Post.

Finance Minister Arkhom Termpittayapaisith. Photo: Bangkok Post.

Mr Arkhom told parliament the government had tapped into funding sources available under the law to fight COVID-19 but they were still not enough to deal with new waves of the pandemic.

Prime Minister Prayut Chan-o-cha also told MPs the country was in critical need of the loan because nobody knew when the COVID-19 crisis would bottom out. He insisted the spending would be prudent and there would be enough money to buy sufficient supplies of the vaccine.

Mr Arkhom, meanwhile, said the government had not been able to collect much tax income during the 2021 fiscal year as a result of businesses losing income or closing as a result of the pandemic.

Funding from the 2022 budget bill, which is before parliament, would not provide a timely response to the crisis, he said. A comprehensive response could not be funded through normal budgetary procedures, so the government had to fall back on the emergency loan.

The decree allows the Finance Ministry to borrow B500bn but loan contracts must be signed by Sept 30 next year, the minister said. About B30bn has been earmarked to buy medical supplies, drugs, vaccine shots, research and the development of vaccines.

Dive Supply Co., Ltd.

About B300bn has been set aside for funding relief schemes for people across various sectors and the rest allocated for social and economic rehabilitation projects.

Mr Arkhom said the government would take into account financial discipline, cost-effectiveness and transparency.

The loan decree was published in the Royal Gazette and followed last year’s B1 trillion emergency loan decree. The loans are likely to raise the government public debt level higher than previously expected.

The Public Debt Management Office projected the public debt-to-GDP ratio at the end of fiscal year 2020-21 to be 58.6%, near the fiscal sustainability framework ceiling of 60%, assuming the government spent the B1trn and B100bn from the new loan.

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Kurt | 12 June 2021 - 13:15:12

Since the Thai army coup in 2014, Thailand's finances are going down the drain. Debt after debt. Loan after loan. Wonder how long this can go on. After a restoration of democracy, young and future Thai generations will face a huge Thai debt to deal with. Such a inheritance will be a nightmare.

Kurt | 10 June 2021 - 11:32:32

Seen slow vaccination process, les than 2-4% of the population vaccinated 1 or 2 times, Finance Ministry must think about 2 years at least for Covid-19 to bottom out. Cancel the 4 submarine order due to financial force majeure. Submarines are perfect breeding places, depart with 1 asymptomatic crew member, return with full infected crew.

Kurt | 10 June 2021 - 10:39:07

Perhaps Norway didn't know that 'Thai borrowing' not includes a pay back. If you really want your money back ask for a chanote as a pledge. Norwat should have asked for chanote of Government House. :-)

Nasa12 | 10 June 2021 - 09:30:28

The Public Debt for every single Thais are about 400.000 Bath Thailand have borrowed about 10 Trillions bath the last years. And from 2015 to 18 this Government borrowed 2.088.416.683NOK / 241.180.333USD from the Norwegian pension find. And still they have not paid one single bath back to Norwegian people. 

Gat Huckle | 10 June 2021 - 08:48:02

 The central questions are never answered in these articles. From whom is this money being borrowed, and at what duration and rate? Also, what is the collateral? I have a feeling the gov't means printing but is saying borrowing. 

 

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