Thailand’s Prime Minister Prayut Chan-o-cha defended his government’s decision to issue three executive decrees, one of which is to authorize the securing of a one trillion baht loan to cushion the impacts of COVID-19 on the economy and to restore international community’s confidence in Thailand.
Addressing members of the House of Representatives on the first day of the debate, the Prime Minister said the pandemic has caused devastating damage to the Thai economy, which contracted by 18% during the first quarter of this year, with the tourism sector being the hardest hit.
He said that the Government has tried to manage the economy within the limits of the current budget which, he claimed, is insufficient to cope with the severity of the problem, adding that an additional trillion baht is needed.
Due to the urgency and unavoidability of the current crisis, he said that the loan is the last option, if the Government is to save the country’s economy, to prevent a national disaster and to maintain public safety.
The Prime Minister said that he is fully aware of MPs’ concerns regarding the administration’s fiscal discipline and transparency in the disbursement of such a huge loan, assuring that the Government has strictly maintained fiscal discipline by capping the amount of the loan at one trillion baht and preparing a list of projects and activities to be implemented.
He maintained that the one trillion baht constitutes 57.96% of the country’s GDP and is well within borrowing limits, which are set at 60% of GDP.
The bulk of the money will be borrowed from domestic sources, he said, adding that the Government would also consider foreign sources of funding, if the country experiences liquidity problems in the domestic financial market.
The Government also issued a decree authorizing the Bank of Thailand to provide soft loans to private enterprises, to prevent them from defaulting on debt repayments or to enhance their liquidity.
The third decree establishes a bond stabilization fund, amounting to 400 billion baht, by mobilizing funds in the bond market, said the Prime Minister.
The debate on the three executive decrees will last until Sunday.
Related story: Opposition leader describes three loan decrees as a blank cheque
