The government may need to borrow an additional 1 trillion baht to address the impact of the coronavirus pandemic, says the Federation of Thai Industries (FTI).
The borrowing would be used to stimulate the grassroots economy, which is still reeling from the crisis, said FTI chair Supant Mongkolsuthree.
On Tuesday, the cabinet approved the finance ministry’s proposal to borrow $1.5 billion from the Asian Development Bank to stimulate and rehabilitate the economy. The borrowing scheme is part of the government’s plan to issue a royal decree to borrow 1 trillion baht for stimulus.
Of the 1 trillion baht, 600 billion baht is for implementing health-related plans and giving financial aid to affected individuals. The remaining 400 billion baht will go to economic and social rehabilitation through projects aimed at creating jobs, strengthening communities and building community infrastructure.
The public debt level will rise to 57 percent of GDP from June’s 44.8 percent upon borrowing the full amount under the loan decree.
Supant said the government should extend the debt moratorium measure for small and medium-sized enterprises (SMEs) from six months to two years or until 2022.
This is because SMEs are likely to continue being affected by the crisis next year, he said.
The two-year debt moratorium measure could be divided into two phases, according to Supant.
The first phase, spanning six months, would be for an interest payment suspension and the remaining period would be for interest-only payment.
The move would help SMEs adjust to the crisis as profits disappear this year, Supant said.
Pisit Serewiwattana, president of the Export-Import Bank of Thailand, said the bank is considering extending the debt repayment period for customers affected by the pandemic.
The measure to extend debt repayment by six months will end in September and October and could be extended by another year, Pisit said.
A source at Exim Bank said there are many ways for customers to extend debt repayment, such as halting principal and interest payment or payment of half the principal.