State urged to borrow another B1tn
The Federation of Thai Industries (FTI) said the government needs to borrow an additional 1 trillion baht to help boost the economy next year, following a months-long lockdown to curb Covid-19 outbreaks.
The group has taken the same approach as the Bank of Thailand, which last month urged the government to borrow another 1 trillion baht to rehabilitate the reeling economy and boost the country's long-term growth prospects.
Thailand needs more money to drive forward the economy, which has been contracting due to the pandemic, said FTI chairman Supant Mongkolsuthree, adding that the government's earlier 500-billion-baht emergency loan decree was not enough.
"The 1-trillion-baht loan decree is needed to boost the economy in 2022. Thailand should follow other countries to borrow more money to effectively restore the economy," he said.
Last year, the government issued its first emergency loan decree to authorise it to borrow 1 trillion baht to fund a range of economic stimulus schemes.
A second decree was issued this year to allow the government to borrow an additional 500 billion baht.
During a debate over additional borrowing last month, Finance Minister Arkhom Termpittayapaisith said there was no need for additional money, insisting the existing 500-billion-baht loan was sufficient.
The FTI said extra borrowing must be used to help small and medium-sized enterprises (SMEs), which bore the heavy brunt of the pandemic and lockdown measures.
"SME businesses are the backbone of our economy," said Mr Supant. "Most SMEs were seriously affected by the pandemic. They really need help from the government."
The FTI has thrown its support behind the Joint Standing Committee on Commerce, Industry and Banking's proposal that asks for the Thai Credit Guarantee Corporation's SME soft loan scheme guarantees to be increased to a ratio of 70%, up from the existing guarantee ratio of 40% of the total credit line.
The ratio should be increased to 100% for businesses affected by the lockdown measures as this will help entrepreneurs gain better access to the state's soft loan scheme, said Mr Supant.