Thailand Said to Plan USD22bn Borrowing for Covid Relief

  • Thailand plans to borrow an additional THB700bn (USD22bn) to fund measures to counter the worst wave of Covid-19 outbreak to hit Southeast Asia’s second-largest economy, people familiar with the matter said.
  • A meeting of the cabinet chaired by Prime Minister Prayuth Chan-Ocha on 18 May 21 approved the new borrowing plan from the finance ministry, the people said, declining to be identified before a public announcement.
  • The government proposes to spend THB400bn of the new borrowing to help various sections of the society affected by the new outbreak, while THB270bn will be used to revive the economy, the people said. About THB30bn will be set aside to finance medical supplies and vaccines to contain the latest outbreak, they said.
  • The fresh borrowing can be completed before 30 Sep 22 and is on top of an ongoing THB1tr debt plan authorized by the cabinet in 2020 to fund pandemic relief measures, they said.
  • Thailand’s public debt-to-gross domestic product ratio may rise to 58.6% by Sep 21 with the additional borrowing but would still be below the nation’s 60% debt ceiling, the people said. The government will need to issue an emergency law that needs to be endorsed by the king before the public debt management office can begin raising fresh debt, they said.
  • Standard Chartered Bank Plc expects a Prayuth-led fiscal policy committee to raise the debt ceiling to 65% of the GDP by end 2021 when a clearer picture of the domestic Covid situation and effectiveness of fiscal measures in the short- and medium term is expected to emerge.
  • Additional borrowing may be through existing instruments including treasury bills, promissory notes and savings bonds, Tim Leelahaphan, Bangkok-based economist at the bank, said in a note.

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