Prime Minister defends Covid-19 loan plan

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Prime Minister Prayut Chan-o-cha addressing a meeting of the House of Representatives on Wednesday, the first day of a debate on the government’s three executive orders on Covid-19 borrowing. The photo on the left shows parliamentarians wearing face masks standing and keeping enough space from each other during the meeting. (Photo by Chanat Katanyu)

The government on Wednesday defended its plan to borrow about 1 trillion baht to finance its aid program for those affected by the Covid-19 pandemic, repair the financial system and restore economic security.

“I insist that this borrowing plan will not affect the country’s public debt balance and the government’s compliance with the public debt law and financial discipline,” the prime minister said. Prayut Chan-o-cha.

He was addressing a Lower House meeting on Wednesday, the first day of a three-day debate on the government’s three decrees needed to support its Covid-19 rehabilitation programme.

They include a decree authorizing the Ministry of Finance to borrow around 1 trillion baht to finance the government’s economic and social rehabilitation in the aftermath of the Covid-19 pandemic; a decree allowing the government to provide financial assistance to business operators affected by the epidemic, and a decree aimed at stabilizing the country’s financial system and restoring economic security.

Even counting this new borrowing, public debt will only reach 57.6% of gross domestic product (GDP), which is still below the 60% ceiling, Gen. Prayut said. “The government will certainly be able to manage and repay these debts. And again, I emphasize that these decrees are urgent and unavoidable,” he said.

A detailed borrowing plan has been adopted which requires all loan contracts to be signed by September 30 next year, he said. Guidelines on how to spend the money have been drawn up to ensure good discipline is applied.

Along with other sources in the budget, approximately 45 billion baht will go to funding medical and public health work related to the prevention of Covid-19, an additional 555 billion baht to financial assistance to farmers and entrepreneurs affected by the outbreak and the other 400 billion baht to fund other economic and social policies that can be approved or adjusted by the cabinet, he said.

A committee will review spending plans before they are sent to cabinet for approval, he said, adding that a detailed report will also be submitted to parliament within two months of the end of each fiscal year to ensure transparency.

Opposition leader Sompong Amornvivat, meanwhile, accused the government of failing in its past efforts to mitigate the impact of the Covid-19 outbreak. This resulted in the need to borrow such a large sum of money.

Anudith Nakornthap, general secretary of the Pheu Thai party, said there was only 1.5 trillion baht left to take on future public debts the government might have to take on once this borrowing is added to the current total.

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