The borrowing is a part of an executive emergency decree empowering the Thailand’s Finance Ministry to seek loans up to one trillion baht ($32 Bln) to combat economic and social problems resulting from COVID-19 .
Finance Minister Arkhom Termpitayapaisith and Hideaki Iwasaki, country director for the Thailand Resident Mission of ADB, signed the contract of the COVID-19 Active Response and Expenditure Support Program worth US$1.5 billion.
Public Debt Management Office director-general Patricia Mongkhonvanit said that the government has already borrowed Bt338 billion out of the proposed Bt1-trillion loan.
The ADB’s program supports the government’s efforts to counter the impacts of the coronavirus disease (COVID-19). With a large tourism sector, strong global supply chain links, and a large base of migrant workers, Thailand’s economy is highly vulnerable to the pandemic.
The government and Bank of Thailand (BOT) introduced a number of relief and stimulus packages, totaling $71.4 billion (B2.3 trillion) to support the healthcare sector, protect the poor and the vulnerable, stimulate the economy, and stabilize the financial markets in fiscal years (FY) 2020 and 2021.
Fiscal stimulus measures account for $38 billion (B1.2 trillion), and the rest are monetary measures taken by BOT. The large relief program together with a steep revenue compression will double the fiscal deficit to 5.3% of GDP and almost double the total financing needs for FY 2020 to $39.9 billion.
The government sought Asian Development Bank (ADB) support to cover the exceptional fiscal requirements in FY 2020.