The government plans to borrow up to 15-20% of the money in dollars required for its 2-trillion-baht worth of infrastructure projects, says Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong.
Liquidity in the local financial market is ample to finance the entire project, but the government is poised to issue dollar-denominated bonds. The aim is to set the benchmark Thai government bonds in overseas markets, he said yesterday during a meeting with government agencies and state enterprises to encourage them to speed up budget disbursement.
The pricing and coupon rate of the planned bonds will reflect foreign investors' view of the country's financial position.
"In the past, we always offered overseas bonds when we were in dire need of money if the local market had a liquidity crunch. We disappeared from the international market when we had a liquidity surplus," he said.
Earlier, Prime Minister Yingluck Shinawatra said when she and Mr Kittiratt met with the Thai Bankers' Association (TBA) in September that 40% of the infrastructure projects would be financed by issuing dollar-denominated bonds, matching machinery imports for the megaprojects.
The projects, slated to start next year, should see their construction span for seven years. The administration pinned its hopes on the massive investment, the bulk of which is for dual-track and high-speed rail, aiming to boost the country's lacklustre economy.
Mr Kittiratt said the government targets 95% disbursal of the 2.525-trillion-baht fiscal budget. Of the total, 17.5% or 441 billion baht is investment budget and 82% is estimated to be drawn this fiscal year.
Some 2.4 trillion baht in public spending is estimated to be injected into the economy the current fiscal year, or 600 billion each quarter.
Another 146 billion baht in carry-over budget will be spent this fiscal year, he said.
This does not include the off-budget 2-trillion-baht infrastructure investment and the 350-billion-baht water management projects.
The budget deficit for the current budget accounts for 2% of the country's GDP, down from 4% the previous fiscal year.
He said government officials should focus on disbursal and not revenue collection that reportedly exceeded the government's goal.