Listen to this story |
Thailand will borrow some 13 billion baht from Japan according to a Royal Gazette announcement on Friday.
The announcement said the “emergency support loan” was for the Ministry of Finance to use to mitigate economic and social problems that were caused by the Covid-19 pandemic.
The loan was approved by the Cabinet on April 26.
The 15-year loan contract with an interest rate of 0.01 per cent per year was made with the Japan International Cooperation Agency (JICA). The loan payment, scheduled for May 20 and November 20 of every year, will be exempted for the first four years.
The Front-End-Fee was 0.2 per cent and this payment has to be made within 60 days after the contract is activated.
This loan came on top of the 1.5 trillion baht emergency loans that were made by Prime Minister Prayut Chan-ocha’s administration between 2020 and 2021.
The public debt ceiling was increased from 60 per cent to 70 per cent of the gross domestic product in 2021 and the outstanding was at 60.81 per cent of the GDP or 10.05 trillion baht as of the end of April.
The Bank of Thailand’s Monetary Policy Committee said on Wednesday that the Thai economy is recovering with improving domestic demand and tourism income but high inflation is now leading to higher living costs.
They expect the economy to expand by 3.3 per cent in 2022 and 4.2 per cent in 2023. Headline inflation is projected to be at 6.2 per cent in 2022 and 2.5 per cent in 2023.
The World Bank said in May that Thailand’s economy grew faster than expected in the first quarter of 2022 because of less Covid-19 restrictions and strong exports.
However, they expect the economic expansion to slow down in the second quarter because of rising energy costs due to the war in Ukraine which is impacting consumer spending.
