Govt to raise debt ceiling More borrowing to rehabilitate economy

The government has decided to raise the ceiling of the public debt-to-GDP ratio from 60% to 70% which will allow further borrowing to rehabilitate the economy battered by Covid-19.

The decision was made by the State Monetary and Fiscal Policy Committee chaired by Prime Minister Prayut Chan-o-cha yesterday.

The committee is made up of representatives from the Finance Ministry, Bank of Thailand, the National Economic and Social Development Council and the Budget Bureau.

Finance Minister Arkhom Termpittayapaisith said that the decision was intended to provide the government with more fiscal space should the need arise for the government to borrow more money to carry out medium-term financial policies. Mr Arkhom assured that the government still has the ability to repay debts.

“The revision of the ceiling is in line with Section 50 of the 2018 State Fiscal and Financial Discipline Act which authorised the committee to revise it every three years,” he said.

A Finance Ministry source said that the decision to raise the ceiling corresponded with the global and domestic economic situations impacted by Covid-19 as the government has increased its financial burden to rehabilitate the flagging economy.

The government issued its first emergency loan decree last year to authorise it to borrow 1 trillion baht to fund its stimulus schemes to combat the pandemic. A second decree was issued this year to allow the government to borrow an additional 500 billion baht.

The Bank of Thailand (BoT) previously urged the government to borrow an additional 1 trillion baht to address the severe economic impact of the pandemic and boost the country’s long-term growth prospects.

The central bank’s governor, Sethaput Suthiwartnarueput, said earlier he would consider such state borrowing to be reasonable.

Given that the economic impact of the pandemic is expected to be harder and longer than the BoT’s earlier assessments, fiscal policy should play a key role in ameliorating lockdown pain and supporting the economy, Mr Sethaput added.

Lower household incomes and higher unemployment caused by the pandemic are the key affected areas that need fiscal measures. During 2020-2022, household income is expected to decrease by 2.6 trillion baht, of which 2020-2021 will see a 1.8 trillion baht loss, and another 800 billion baht hit in 2022.

As a result, the BoT sees it as reasonable for the government to borrow an additional 1 trillion baht, which will account for 7% of the country’s gross domestic product (GDP), he said. Such a move would increase the country’s public debt ratio to 70% of GDP by 2024.

If the government borrows now to support economic expansion for the next 10 years, it would be better than borrowing later, Mr Sethaput said. If the government can maintain existing fiscal stability, it would not matter if public debt peaked at 70% of GDP, the governor added.

Mr Sethaput also said the government should use additional borrowing to boost economic multipliers, such as the existing co-payment scheme, loan guarantee scheme, and other subsidy measures to provide people with relief from the hardship of the pandemic.

Another Finance ministry source also said that the revision must be presented to the cabinet for acknowledgement before it is announced in the Royal Gazette.

The same ministry source said the committee’s meeting agreed that fiscal space under the 500-billion-baht loan decree is now very limited.

“If the ceiling had not been raised to 70%, investment projects carried out by state agencies and state enterprises that are awaiting loans to implement them would have been impeded,” the source said, adding that the revised ceiling is intended for medium-term fiscal policies so there is no need to borrow up to 1 trillion baht straight away because the 500-billion-baht loan decree is still adequate for short-term policies to improve the economy.

“We’re running short of fiscal space. If the ceiling hadn’t been raised, this would have had an adverse impact on several investment projects by state agencies and enterprises. The ceiling is only raised just in case, and no money has been borrowed yet,” the source said.

Sanan Angubolkul , chairman of the Thai Chamber of Commerce, previously said that raising the ceiling was necessary for the government to have enough money to revive and propel the economy.

The economy has suffered an estimated 1 trillion baht in damages caused by the pandemic since early this year, Mr Sanan said. The chamber has urged the government to expedite spending of the current loans and come up with a plan for additional borrowing to rehabilitate the economy, he said.

Internet Explorer Channel Network
News Related

OTHER NEWS

HUAWEI, partnering with government and private sector, organises final round of ‘Spark-Ignite 2021 – Thailand Start-up Competition' Aiming to enhance digital startups while empowering Thailand to become ASEAN Digital Hub

Huawei Technologies (Thailand) Co., Ltd., together with partners from government and the private sectors, recently held the final round of ‘Spark-Ignite 2021 – Thailand Start-up Competition’, enabling Thai startups to ... Read more »

Compo for family of student who died after first jab

A portrait on Surachai Orsapanich is seen with his coffin and funeral wreaths at Wat Pa Jitta Samakkhi in Muang district, Nakhon Ratchasima, on Thursday. He died at the age ... Read more »

Transgender live-streamed sex with boyfriend to subscribers

Police detain Karnklao Klomkan, 30, alias Nong Phrai, for allegedly streaming sexual activities with her boyfriend to paying subscribers on a LINE group, in Tak’s Sam Ngao district on Thursday. ... Read more »

GetLinks hits record numbers in pandemic times, and launching New AI Digital Talents Platform supporting freelancers and global remote work

GetLinks Job Search is specifically set to assist digital professionals in their search for all types of work, including full-time, project-based, freelance or remote Bangkok, 5 October 2021 — GetLinks, ... Read more »

VNU Asia Pacific drives scientific laboratory equipment market through the full-fledged online event: Thailand LAB & FutureCHEM INTERNATIONAL 2021

VNU Asia Pacific in association with Science and Technology Trade Association and Thailand Center of Excellence for Life Sciences (Public Organisation) under the Ministry of Higher Education, Science, Research and ... Read more »

NIA and FutureTales Lab by MQDC launch podcast on Thailand 2030 6 dimensions Thailand must address with innovative policies

National Innovation Agency (Public Organization), or NIA, and FutureTales Lab by Magnolia Quality Development Corporation Limited (MQDC) are launching a podcast “Futures MEME” under the project “Futures and Beyond: Navigating ... Read more »

Frasers Property Thailand celebrates the success of ‘One Platform' strategy with new TRIS rating upgrade to ‘A'

Frasers Property (Thailand) Public Company Limited, or FPT, the first company with a fully-integrated real estate platform in Thailand, on 15 October 2021 announced that TRIS Rating has upgraded the ... Read more »

More Covid-19 lockdowns in Nakhon Si

A screening checkpoint at the entrance to a locked-down community in Muang district of Nakhon Si Thammarat. Five more communities were closed off on Friday as Covid-19 continued to spread ... Read more »

Demolition of encroaching resorts underway, 19 years on

The view from the twin resorts found to be encroaching on Srinakharin Dam National Park in Sri Sawat district, Kanchanaburi, 19 years ago. Demolition will take another month. (Photo: Piyarat ... Read more »

'Art transcends race': Paris Opera Ballet's first Asian etoile ballerina

Sae Eun Park is the first Asian ballerina to reach the top etoile rank in the Paris Opera Ballet’s 352-year history. SEOUL: When Sae Eun Park auditioned for the world's ... Read more »

Fit and fun Active venues to get the adrenaline going

Since the government has eased restrictions for all sports venues in Bangkok, many are eager to get back on the fitness track. Besides the obvious go-to gyms, there are alternative ... Read more »

Network 2025 Enabling APAC Business Success

Gary Lu, President of Network Marketing & Solution Sales Department, Huawei The Asia Pacific Target Network Conference themed “Consolidate Elastic Target Network, Unlocking New Digital Value” concluded online on October ... Read more »

A city getaway De-stress at Centara Grand at CentralWorld

Travelling to a nearby province for a beach or a tranquil mountain stay is great, but just staying in the city offers as much as all the trappings of a ... Read more »

The DIY revolution Take down a regime with homemade chaos in Far Cry 6

The latest entry to the Far Cry franchise takes you on yet another journey of liberating a location from the clutches of a villainous madman. While the game remains largely ... Read more »

Less is more La Scala welcomes a new chef and cooking style

Chef Eugenio Cannoni. (Photos: LA SCALA SUKHOTHAI) A few courses into chef Eugenio Cannoni's first tasting menu at La Scala and you'll notice that each dish is monochromatic. But that ... Read more »

The Supersports ‘Celebrate Our Heroes' Campaign – invites everyone to keep moving and fighting Big promotions coming to celebrate the 24th anniversary, boosting in-store and online sales in celebration of all of our heroes out there, keeping bodies and minds strong for any situation to come

Supersports, Thailand's No. 1 sporting goods store under Central Retail, is celebrating its 24th anniversary with the Celebrate Our Heroes campaign to express gratitude to all those who have been ... Read more »

Pandemic leads to epidemic The Covid-19 crisis has led to a rapid rise in household trash, including problematic contaminated waste. How the city addresses this may determine Bangkok's future

Bangkok, as the city that generates the highest amount of waste per day in Thailand, saw over 2.2 million tonnes of trash in 2018, according to figures from the Department ... Read more »

A new generation slasher Netflix's There Is Someone Inside Your House is meant for Gen Z audiences but it suffers from a lack of originality and is too predictable

Théodore Pellerin as Oliver ‘Ollie’ Larsson in There’s Someone Inside Your House. DAVID BUKACH/NETFLIX Recycling stories isn't new but common practice in Hollywood. However, it seems to be the main ... Read more »

Time is not on anybody's side Making its Asian premiere in Busan, Jakrawal Nilthamrong's new film is a study of old age and the unstoppable march of time

A scene from Anatomy Of Time. There's the anatomy — the bone and the flesh, supple or flaccid. Then there's time, the cruellest judge of all. In Jakrawal Nilthamrong's Anatomy ... Read more »

Sühring makes World's 50 Best Restaurants list

Sühring restaurant in Bangkok has been named No.40 on the 2021 World's 50 Best Restaurants list, the highest entry from Thailand this year. Celebrated last week in Antwerp, Belgium, the ... Read more »

Double time Chopard's Alpine Eagle Cadence 8HF beats with a high-frequency heart

Alpine Eagle Cadence 8HF in titanium. In 2012 Chopard played a pioneering role in commercialising the world's first chronometer-certified timepiece oscillating at a frequency of 8Hz, for achieving a higher ... Read more »

Asean gets set for the digital era

Asean members are accelerating efforts to upgrade the digital economy within the bloc to brave digital challenges brought about by the pandemic. Trade Negotiations Department director-general Auramon Supthaweethum, who plans ... Read more »

Man offers family's organs to save home

A local government official has offered to sell his family's eyes and kidneys in a desperate bid to raise money after his house and land were seized because he was ... Read more »

Microsoft shuttering LinkedIn in China as rules tighten

LinkedIn is shuttering the Chinese version of its job-focused social network. NEW YORK: Microsoft on Thursday said it will shut down career-oriented social network LinkedIn in China, citing a “challenging ... Read more »

DoH to seek B9bn to fund Pathum Thani road project

The Department of Highways (DoH) is preparing to seek almost 9 billion baht to fund a 10-kilometre road project in Pathum Thani. Sarawut Songsivilai, chief of the department, said the ... Read more »

'Human trafficker' nabbed

A woman was arrested in Samut Prakan yesterday for allegedly luring Thai women into forced prostitution in Bahrain. Police from the Anti-Trafficking in Persons Division, led by its chief, Pol ... Read more »

Trans Netflix staff plan walkout over Chappelle special

Dave Chappelle, 48, has been accused of transphobia over Netflix specials including “The Closer”. LOS ANGELES: Transgender Netflix employees are planning a walkout to protest a Dave Chappelle comedy special ... Read more »

New cocoa fruit drink to make hot chocolate a has bean

Typically, 70 percent of the cacao fruit including the peel, pulp and juice are discarded, with just the beans used to make chocolate. THE HAGUE: Forget hot chocolate: a cold ... Read more »

10,486 new Covid cases, 94 more deaths

Buddhist monks chant prayers during the funeral of a dead Covid-19 patient at Wat Bang Phli Yai in Bang Phli district, Samut Prakan, on Thursday. (Photo: Somchai Poomlard) There were ... Read more »

Russia to lift Covid ban on flights to Thailand, other countries Country reports record daily virus cases, deaths

Planes of Aeroflot and Rossiya Airlines are seen parked at Sheremetyevo International Airport outside Moscow on April 8, 2020. (Reuters photo) MOSCOW: Russia will lift its Covid-19 ban on flights ... Read more »

Snack on the fiery flavours of Thailand Let your culinary imagination run wild with Ging Grai's gourmet popcorn

Popcorn has over the years evolved from a run-of-the-mill snack to gourmet delicacy. It is now offered with imaginative flavours — savoury and sweet. Fine restaurants in big cities wordwide ... Read more »

Zoho foresees hyper-personalisation focus Businesses to rethink sales post-pandemic

Gibu Mathew, vice-president and general manager for Asia Pacific of Zoho Corporation A surge in online engagement once the pandemic is controlled is expected to push various organisations to adopt ... Read more »

Competition office eyes level playing field Complaints have risen the past 4 years

Mr Santichai says as of September, the office has received 99 complaints about unfair trade competition. Complaints about unfair trade competition have risen the last four years since the Trade ... Read more »

PIER: Declining unity may hit growth

Anti-government protesters create flames by lighting up aerosol cans during a demonstration in support of the release of political prisoners outside Bangkok Remand Prison on Wednesday. AFP The Bank of Thailand's ... Read more »

IMF frets over supply-chain bottlenecks Disruptions hobble recovery momentum

Supply-chain bottlenecks may cause shortage of Halloween items. (AFP photo) WASHINGTON: Global finance officials gathered in Washington on Wednesday were focused on finding a way to alleviate supply-chain bottlenecks that are ... Read more »

Value of e-commerce forecast to hit B4tn DTC approach now a prevailing trend

The value of Thailand's e-commerce is expected to grow 6.1% to 4 trillion baht this year, crucially driven by businesses that are sharpening their focus on the business-to-customer (B2C) model ... Read more »

Extravaganza to cost up to B600m Concerts planned by Lisa, Andrea Bocelli

Fireworks light up the sky over the Grand Palace on New Year’s Eve in 2016. WICHAN CHAROENKIATPAKUL The Tourism and Sports Ministry expects to use a budget of 500-600 million baht ... Read more »

Most SMEs under digital attack over past year

Some 65% of Thai SMBs surveyed in the latest cybersecurity study by Cisco have suffered cyber incidents in the past 12 months, as opposed to 56% in Asia Pacific. (Reuters ... Read more »

Clubhouse grew 'way, way too fast', says CEO

The Clubhouse app is seen on a smartphone in this illustration taken on July 13, 2021. (Reuters photo) Clubhouse, the audio-only app designed to be a virtual conference hall, generated ... Read more »

No refunds over jab delivery

The Private Hospitals Association on Thursday said it has no refund policy for people who wish to cancel their Moderna vaccine preorders. However, they can postpone their vaccine appointment or ... Read more »