The Bank of Thailand (BoT) is urging the government to borrow an additional 1 trillion baht to address the severe economic impacts of the COVID-19 pandemic and to boost the country’s long-term growth prospects.
BoT Governor Sethaput Suthiwartnarueput said he considers such state borrowing to be reasonable as the economic impacts of the pandemic are expected to be harder and last longer than the BoT’s earlier assessments and fiscal policy should play a key role in ameliorating lockdown pain and supporting the economy.
He said the BoT sees it as reasonable to borrow an additional 1 trillion baht, as lower household incomes and higher unemployment, caused by the outbreak, are the areas which need fiscal support. Such a move would increase the country’s public debt ratio to 70% of GDP by 2024.
Mr. Sethaput also said the government should use additional borrowing to boost economic multipliers, such as the existing co-payment and loan guarantee schemes and other subsidy measures, to provide relief from the hardships of the pandemic. (NNT)
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