Finance Minister Arkhom Termpittayapaisith says there is no need for the government to borrow additional money to combat the pandemic because the existing 500-billion-baht loan is sufficient.
On Monday, Bank of Thailand governor Sethaput Suthiwartnarueput said at a press event the government should add at least 1 trillion baht in the economic fight against the pandemic. Additional government borrowing could address the severe economic impact of the pandemic and improve the country's long-term growth prospects, he said.
Given that the economic impact of the pandemic is expected to be harsher and longer than the central bank's earlier assessments, fiscal policy should play a key role in soothing lockdown pain and supporting the economy, Mr Sethaput said.
Mr Arkhom said the ministry has not discussed additional borrowing with the central bank as the existing 500-billion-baht loan under the 2021 emergency loan decree is adequate for the situation. The government issued an emergency loan decree last year to allow it to borrow 1 trillion baht to combat the pandemic, followed by a second decree this year for another 500 billion.
He said the National Economic and Social Development Council is considering the details of how to spend the 500 billion baht. Mr Arkhom wants to look at the council's recommendations before deciding if more lending is needed.
For the first batch of 1 trillion baht, as of Aug 13, the cabinet has approved 301 projects worth 992 billion to be funded by the loan. Of the total, 782 billion baht has been disbursed, accounting for 78.8%.
A Finance Ministry source who requested anonymity said 60 billion baht of the 500-billion loan has been approved. Of the total, 30 billion baht was allocated to compensated workers in 10 red-zone provinces: Bangkok, Nakhon Pathom, Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon, Narathiwat, Pattani, Yala and Songkhla.
The Joint Standing Committee on Commerce, Industry and Banking previously suggested the public debt-to-GDP ratio be raised to 65-70% because the 1.5 trillion baht has been inadequate in dealing with the pandemic.