Thailand should focus on reviving the economy ahead of injecting money into Covid-19 relief programmes, Finance Minister Arkhom Termpittayapaisith said on Monday, in a move perceived to signal a scaling down of financial aid for victims of the pandemic.
Speaking after a meeting of the Federation of Thai Capital Market Organisations (Fetco), the minister said the government should also take into consideration the country's financial situation when deciding whether or not to seek more loans.
Although there is room for Thailand to incur around 10% more new public debt given its current ratio of public debt to gross domestic product (GDP) of about 60%, the country still needs resources set aside in case of further unforeseen emergencies, he said.
As Covid-19 appears to be less virulent now, most countries have reopened and are gearing up for an economic recovery, a direction Thailand should be heading in as well, he said.
After having already borrowed the maximum 1.5 trillion baht allowed under two emergency loan decrees to fund projects designed to mitigate the economic impact of Covid-19 over the past two years, to borrow or to not borrow more money depends on how necessary new loans are now and will be in the future, he said.
And if the answer to this question is yes, a clear purpose for borrowing more must be given, especially as business sectors are actually beginning to recover, he said.
The tourism sector, for one, is seeing a rise in international visitors even though the number remains far below the about 40 million per year before Covid-19, he said.
As for the government's previous resolution to cut 3 baht in excise tax per litre of diesel, due to end on May 20, the minister said it is too soon to say right now whether the energy price subsidy programme should be extended.
As the Russia-Ukraine war continues to impact the world's oil prices, Thailand must bear the brunt of high production costs of consumer products and related services, said Commerce Minister Jurin Laksanawisit.
The high energy prices will continue exacerbating the inflation situation globally, he said.
In related news, a Government House source said a proposal has been made to replace the current co-payment scheme with one offering a reduced sum of only 25% from the government side and requiring consumers to pay the rest of product prices.
Over the past four phases of this scheme, the cabinet earmarked more than 129.3 billion baht in funding, while there is still about 74 billion baht left for the next phase, said Pornchai Thiraveja, director-general of the Fiscal Policy Office.
A total of 210 billion baht has been used to fund the scheme so far, while only 74 billion baht remains for the next phase.