Cabinet to mull borrowing in foreign funds for projects

Cabinet to mull borrowing in foreign funds for projects

A 57-billion-baht borrowing plan to finance roads and water management will go to the cabinet next week for approval.

The plan is part of a slate of projects worth 77 billion baht, said Theeraj Athanavanich, deputy director-general of the Public Debt Management Office (PDMO).

Of the 77 billion baht, 40 billion is for two-year water management projects and the rest for road construction and repairs.

The PDMO is set to seek loans worth 57 billion baht, of which 23 billion will be for water management projects and the rest for road construction and repairs.

The borrowing is expected to proceed by May and will be lent in foreign-denominated currency under Section 22 of the Public Debt Management Act, Mr Theeraj said without elaborating.

Under Section 22, the Finance Ministry has been given a mandate to borrow in foreign-denominated funds of up to 10% of the annual budget.

Alternatively, the ministry can opt to borrow in baht-denominated amounts from the domestic market for the sake of Thai capital market development.

The government's road construction and repair projects are aimed at improving infrastructure and pumping money into the system to kick-start the stubbornly sluggish economy.

Moreover, the projects will help create jobs upcountry during the dry season.

Helping rice farming families during the dry season is among the government's priorities, as lower than normal water reserves have made it difficult for farmers to cultivate the second crop.

Sagging farm prices have also dealt a blow to farmers' incomes.

Mr Theeraj estimates that the public debt ratio will rise to 49% of GDP by the end of this fiscal year from 46.5% at the end of January.

Public debt amounted to 5.66 trillion baht at the end of January, of which 93.8% was domestic liabilities and the remainder was foreign debt.

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