The Thailand cabinet has given the green light regarding a huge stimulus package that is expected to inject up to 400 billion baht (US$12.7 billion) into the economy in order to reduce the impact that the COVID-19 outbreak has wrought and to provide relief for the many vulnerable SMEs of the country. Said package was proposed at a meeting of economic ministers.
As a result of the ongoing COVID-19 epidemic, economists have downgraded Thailand’s economic growth projections. Kasikorn Research Centre offered the most pessimistic outlook among other research houses. It slashes its forecast for the nation’s GDP growth in 2020 to 0.5 percent on the expectation that the coronavirus could potentially wipe up to 410 billion baht off tourism receipts.
Prime Minister Prayut Chan-o-cha said on Tuesday that the 400 billion baht package was a first-phase measure that could be followed by second-phase action if the impact persists.
Additionally, Finance Minister Uttama Savanayana expressed confidence that the stimulus package will ease conditions for the public and businesses reeling from the impact of the virus.
The stimulus package is currently being viewed as a short term measure that will last for a few months; after which the COVID-19 situation will be assessed once more. Should the situation continue to be detrimental to the economy, more measures will likely be considered.
According to the Finance Ministry, the package will cover all sectors and will benefit 14.6 million low-income earners, who account for about 22 percent of the population, a total of 50,000 village funds nationwide, 7.2 million farming households, and 3 million SMEs, which account for almost 99 percent of all business enterprises in the country. The package is also expected to create up to 14 million jobs nationwide.
It includes soft loans worth 150 billion baht, which the Government Savings Bank (GSB) will lend to commercial banks at just 0.01 percent, so commercial banks can grant loans at 2 percent. Each bank borrower can take out a loan of no more than 20 million baht.
The Bank of Thailand will also allow SMEs and general customers who are bank debtors to undergo debt restructuring without any issues affecting their credit history. Other measures include easing debt-classification criteria to help virus-impacted debtors, and giving banks more flexibility to approve loans in order to give debtors sufficient liquidity.
In the meantime, the Social Security Office (SSO) has also implemented measures that will help promote employment. These include introducing 30 billion baht in soft loans starting at 3 percent interest for SSO-registered entrepreneurs.
