The government is upbeat on the prospects of its fresh 1.9-trillion-baht economic stimulus package alleviating the widespread affects of the Covid-19 outbreak.
The measures include 270 billion baht for six months in cash giveaways to some 9 million people affected by the pandemic. Another 500 billion baht in soft loans will be given to small- and medium-sized businesses.
The economic stimulus is expected to help the Thai economy recover to 3% growth next year from an estimated contraction of 5.3% this year.
The Finance Ministry may seek cabinet approval to lift the public debt ceiling capped at 60% after the implementation of the new economic stimulus, which includes 1 trillion baht in borrowing, said Finance Minister Uttama Savanayana.
"The borrowing will drive public debt to 57% next year from 42% currently. As a result, the cabinet may be asked to consider lifting the debt ceiling if necessary," he said.
The borrowing will be gradually undertaken until the end of September next year, said Mr Uttama.
The cabinet on Tuesday approved the 1.9 trillion baht in spending to help people and businesses affected by the novel coronavirus pandemic.
The Finance Ministry will next week seek cabinet approval on proposed legislation to transfer budgetary funds from each ministry worth 80-100 billion baht to deal with the Covid-19 outbreak.
Night Market Goes Dark This pictures of Rotfai Ratchada market in Bangkok on May 9, 2016, a tapestry of colors packed with shoppers and tourists in Bangkok, cuts a stark contrast with the now empty space devoid of vendors. The market was shuttered after an emergency decree was declared to tackle the Covid-19 pandemic. Pattarapong Chatpattarasill
Mr Uttama said the 1.9 trillion baht accounts for 9% of the country's gross domestic product.
The package, the third phase of the stimulus programme to shore up the economy, will be backed by three executive decrees.
The first decree will allow the government to borrow 1 trillion baht through bond issuance.
Of that amount, 600 billion baht will go to health-related plans and financial aid to affected people. This includes the 5,000 baht in monthly handouts to an estimated 9 million self-employed and laid-off people, which will be extended to six months from three months previously.
"It is not clear how long the outbreak will drag on for so the government has decided to extend the relief period to help affected people," said Mr Uttama.
The remaining 400 billion baht will go to economic and social rehabilitation through projects aimed at creating jobs, strengthening communities and building infrastructure.
Another executive decree will allow the Bank of Thailand to extend 500 billion baht in soft loans with a 2% annual interest rate to SMEs, with a credit line of no more than 500 million each.
Commercial banks and specialised financial institutions will also give SMEs with a credit line not exceeding 100 million baht each a six-month debt moratorium on both principal and interest.
The other executive decree is aimed at cushioning the corporate bond market by setting up a 400-billion-baht Corporate Bond Liquidity Stabilisation Fund, in which the central bank can buy corporate bonds to keep liquidity flowing.
In a related development, the cabinet on Tuesday agreed to extend free electricity to households whose consumption does not exceed 90 units (kilowatts/hour), up from 50 units previously.
The measure will only apply to houses with a power metre size not over 5 amps. Up to 6.4 million households, mostly upcountry, are expected to to benefit from the relief.
Meanwhile, Prime Minister Prayut Chan-o-cha said in a briefing that the Finance Ministry will borrow no more than 1 trillion baht from domestic sources, and the loans will mostly be baht-denominated.
Of the 1-trillion-baht borrowing, 600 billion will be allocated to ease people's plight, including the extension of the 5,000-baht financial aid for another three months or until September, Gen Prayut said.
