Thailand: PM defends government COVID-19 loans plan

  • The government on 27 May 20 defended its plan to borrow about THB1tr to fund its scheme to help people affected by the Covid-19 pandemic, repair the financial system and restore economic security.
  • “I insist this borrowing plan won’t affect the country’s public debt balance and the government’s compliance with the public debt law and financial discipline,” said Prime Minister Prayut Chan-o-cha.
  • He was addressing a Lower House meeting on 27 May 20, the first day of a three-day debate on the government’s three decrees required to support its Covid-19 rehabilitation scheme.
  • They comprise a decree to authorise the Finance Ministry to borrow about THB1tr to fund the government’s economic and social rehabilitation in the aftermath of the Covid-19 pandemic; a decree to allow the government to provide financial assistance to business operators affected by the outbreak, and a decree to stabilise the country’s financial system and restore economic security.
  • Even when counting this new borrowing, public debt will reach only 57.6% of GDP which is still below the 60% ceiling, said Gen Prayut. “The government will certainly be able to manage and repay these debts. And once again I insist these decrees are urgent and unavoidable,” he said.
  • A detailed borrowing plan has been adopted which requires all loan contracts to be signed by no later than 30 Sep 21, he said. Guidelines on spending the money have been drafted to ensure good discipline is applied.
  • A committee would screen spending projects before they are forwarded to the cabinet for endorsement, said Gen Prayut, adding a detailed report will also be submitted to parliament within two months after the end of each fiscal year to ensure transparency.
  • Opposition leader Sompong Amornvivat, meanwhile, accused the government of failing in its past efforts to mitigate the impact of the Covid-19 outbreak. This resulted in the need to borrow such a substantial amount of money.
  • Anudith Nakornthap, secretary-general of the Pheu Thai Party, said only THB1.5tr is left to take on future public debts which the government may need to incur once this borrowing is added to the present total.

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