Government Responds to Prolonged COVID-19 Situation: Supattanapong Accelerates Employment Plans, Supports SME Debt, Prepares 740 Billion Baht for 2021, Allocates 140 Billion Baht from Central Budget, Retains Remaining Loan Capacity of 600 Billion Baht; Budget Bureau Confident in Crisis Management, Proposes Backup Plan to Raise Public Debt Ceiling to 60%

The ongoing COVID-19 pandemic has seen global infections nearing 30 million, significantly impacting the world economy, including Thailand's. Economic recovery is expected to be slow, with projections indicating that the economy will not return to pre-COVID-19 growth levels in 2021.

In light of this situation, the government has prepared measures to address the possibility of a prolonged outbreak beyond initial expectations.

For the fiscal year 2021, the government has allocated approximately 740 billion baht to combat COVID-19, which includes about 140 billion baht from the central budget.

Additionally, funds from the Emergency Decree allowing the Ministry of Finance to borrow money for addressing issues, providing relief, and revitalizing the economy and society affected by the COVID-19 outbreak (1 trillion baht loan decree) still have around 604 billion baht remaining, divided as follows:

1. Economic relief loans of 550 billion baht, with a remaining balance of 253 billion baht.

2. Economic recovery loans of 400 billion baht, with a remaining balance of 307 billion baht.

3. Health-related loans of 45 billion baht, with a remaining balance of 44.9 billion baht.

Deputy Prime Minister and Minister of Energy Supattanapong Punmeechaow stated that measures to support the economy must consider the global outbreak situation, as everything is managed under uncertainty. There is also a need to monitor the potential for a second wave of infections. Therefore, careful consideration is required when implementing various measures, with a current focus on job creation, debt restructuring, and SME support.

If the situation changes and there are factors that ensure no further outbreaks, the government will be ready to inject funds accordingly, and management will adapt.

“Do not view this as a risk but as uncertainty. We must proceed cautiously, addressing issues step by step. If something works well, we can enhance it; if not, we will adjust it. In the future, investment promotion measures will also be necessary, and we are in discussions, waiting for the right timing,” Supattanapong said.

Secretary-General of the National Economic and Social Development Council (NESDC) Tosthaphon Sirisampan noted that managing the economy during this period of COVID-19 impact requires funding from various sources, including loans from the 1 trillion baht loan decree and budget allocations to drive the economy. The government plays a crucial role in spending during this time of high uncertainty due to the pandemic.

For the economic recovery loan of 400 billion baht, it is divided into:

Phase 1: The Cabinet approved a budget framework of 92 billion baht, with 43 billion baht already approved for projects. Additional project approvals for Phase 1 are expected within 2-3 weeks.

Phase 2: The NESDC will propose projects to the Cabinet for consideration with a budget framework of 100 billion baht in October.

Tosthaphon stated that the approval of the budget for economic recovery loans of 400 billion baht must be done cautiously, with project approvals occurring gradually based on the situation and potential risks of a second wave of infections, which may require the government to adjust its budget spending plans, including loan usage.

“Gradual approvals will allow funds to flow into the economy and manage existing resources while monitoring the potential for a second wave of infections. If an outbreak occurs, these funds will still support the economy. However, if there is no outbreak, the funds will be injected into the economy through projects developed by the Economic Situation Management Center in response to the COVID-19 pandemic,” Tosthaphon said.

Reports from the Government House indicate that the economic recovery budget can be utilized until September 2021 under the framework of the 1 trillion baht loan decree. The NESDC has divided the budget usage into four phases and is currently entering the second phase. If the COVID-19 outbreak persists and there is a need for increased budget allocations for relief, adjustments will be made to the economic recovery budget for relief purposes.

SOURCE: www.bangkokbiznews.com