Thailand plans $22.3 billion borrowing for Covid relief

Bloomberg

Thailand plans to borrow an additional 700 billion baht ($22.3 billion) 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 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 400 billion baht of the new borrowing to help various sections of the society affected by the new outbreak, while
270 billion baht will be used to revive the economy, the people said. About 30 billion baht will be set aside to finance medical supplies and vaccines to contain the latest outbreak, they said.
The fresh borrowing can be completed before September 30 next year, and is on top of an ongoing 1-trillion baht debt plan authorised by the cabinet last year to fund pandemic relief measures, they said.
Kulaya Tantitemit, a spokesperson for the Finance Ministry and head of its Fiscal Policy Office, declined to comment. Anucha Burapachaisri, a government spokesman also declined to comment.
Thailand’s public debt-to-gross domestic product ratio may rise to 58.6% by September 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 year end 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.
Thailand, which is grappling with the deadliest Covid wave to hit the nation so far, slashed its growth outlook for this year earlier this week, citing the delay in reopening borders to foreign tourists and slow vaccination. The economy may expand between 1.5% and 2.5% this year, less than the 2.5%-3.5% forecast in February, the National Economic and Social Development Council said.