Finance minister defends Bt400bn borrowing decree as ‘not a blank cheque’

Finance Minister Ekniti Nitithanprapas has explained to parliament that the executive decree to borrow 400 billion baht is “not a blank cheque”, but is necessary to maintain economic stability amid multiple crises stemming from rising global prices.

Responding to opposition MPs’ criticism that using an executive decree limits parliament’s scrutiny of the process, he said Thailand’s economy slowed in the second quarter, while inflation was rising, the country’s current account deficit was growing and people’s purchasing power was declining.

As Thailand depends on oil and gas imports, he admitted that the country had been hard hit by rising global oil prices, resulting in a current account deficit of almost 600 billion baht in just one quarter. This made it urgent to protect the fragile economy through the promulgation of the Loan Executive Decree, he said.

The decree is intended to help Thai people and businesses through the Thai Chuay Thai Plus scheme and fund a plan to transition from fossil fuels to clean energy, he said.

Ekniti also said the borrowing would help turn a crisis into an opportunity by accelerating the transition to clean energy and promoting investment in the sector.

He insisted that the government would borrow only when necessary and in an appropriate amount, while adhering to fiscal discipline and remaining mindful of the public debt ceiling.

This morning, Korn Chatikavanij, deputy leader of the Democrat Party, said giving money to people under the Thai Chuay Thai Plus scheme would have little impact on the economy and would not address its core problems.

He expressed skepticism about the government’s ambitious plan to install solar panels in as many as one million households using funds from the loan, noting that the government had managed to install panels in only 100,000 households last year.

He said it would take at least five years to achieve the target, adding that there was no need for the government to rush to secure such a large loan.

Thailand’s public debt currently stands at 67% of GDP, Korn said, noting that adding the 400 billion baht loan could push the figure above the 70% ceiling.