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The Ministry of Finance welcomed the latest 700-billion-baht loan to the government, saying the previous emergency loan is running out and the economy needs reviving, local news reported on Wednesday.
The cabinet approved the loan on Tuesday.
The loan “will help with the outbreak problem and supporting the economy at the same time while the fiscal budget spending will be another supportive factor,” said Deputy Prime Minister and Commerce Minister Jurin Laksanavisit on Wednesday.
The government already took out a 1-trillion-baht emergency loan to support the economy and provide relief funds, compensations and loans to citizens and businesses during the coronavirus pandemic last year.
The MOF said the extra loan is needed because the previous funding is now down to 16.5 billion baht.
They said the economy needed further support from the impacts of the third wave of the outbreak which started on April 1 and led to more than 84,000 cases and 550 deaths in less than two months.
They said the extra loan will be used to procure Covid vaccines (30 billion baht), relief funds (400 billion) and to support the economy (270 billion).
The MOF now expects 3.2 million foreign visitors this year, down from the previous prediction before the third wave at 5 million.
The outbreak will also reduce the government’s revenue collection for both 2020 and 2021 fiscal year.
They expect the loan to boost gross domestic product (GDP) by 1.5 per cent. Their current GDP forecast for 2021 is at 2.3 per cent compared to 2.8 per cent in January.
The new loan will increase the public debt to 9.38 trillion baht or 58.56 per cent of GDP by September, they added.
The public debt was at 8.4 trillion baht or 54.28 per cent of GDP as of March.
Opposition parties have voiced concerned that the new loan will add more debt burden for the public.
They recommended that the government should look to lower the 2022 fiscal budget of some government agencies, such as the Ministry of Defence, to find more funding instead of taking out new loans.
The cabinet had approved the 2022 fiscal budget worth 3.1 trillion baht, which are pending approval from the parliament.
Of that, 203 billion are being allocated to the Ministry of Defence compared to 154 billion that would be going to the Ministry of Public Health and 141 billion towards the universal health care scheme, if the budget is approved.
Ratchada Thanadirek, the deputy government spokeswoman, said on Wednesday that the proposed budget for Ministry of Defence is already 5.24 per cent or 11.25 billion baht lower than its budget in the 2021 fiscal year.