The government will seek Cabinet approval on 7 April to issue an additional stimulus package of Baht 1.68 trillion, worth about 10% of the Thai GDP to tackle the consequences of Covid-19’s business shutdown and maintain the country’s economic momentum and public safety.
According to Somkid Jatusripitak, Deputy Prime Minister, the 3rd package of government stimulus aims to take care of impacted households, small-scale farmers, business groups, financial sectors and also stabilize overall economy over the next 6-month period. This stimulus package will be funded by reallocating of the existing unused budget from various ministries indicatively at 10% and is being calculated by the Budget Bureau and one executive decree to empower the Ministry of Finance to provide liquidity and stimulate economic for public interests while another two executive decrees to empower the Bank of Thailand (BOT) to directly provide soft loans to financial institutions at lower interest rates and re-lend to SMEs while allowing BOT to purchase good credit corporate bonds which are being rolled over as backstop mechanism in financial markets. In consultation with Securities Exchange Commission, BOT foresees the importance to provide this liquidity backstop in view that the private corporate bond market capitalization over Baht 3.5 trillion currently placed with retail investors, mutual funds, savings cooperatives, pension funds, provident funds has been considered significant compared with overall credit loans made by financial institutions to business enterprises totalling Baht 14 trillion. Public confidence is crucial to ensure the financial and economic stability and keep them going without disruption amid the Covid-19 pandemic.
In addition, flexibility in the financial relief measures to alleviate public’s financial concerns are (i) the imposed deposit guarantee which reduce from Baht 5 million to Baht 1 million will be extended to be implemented in August 2021, instead of August 2020. (ii) the commercial banks’s fund contribution to the Financial Institutions Development Fund will be reduced to 0.23% from 0.46% for two year period upon approval, aiming to effective lower benchmark interest rate offered by the banks.
From the earlier financial aid measures by giving Baht 5,000 monthly compensation for April-June 2020 to unemployed workers, freelances, self-employed who are adversely affected by the impact of Covid-19 outbreak with estimated 3 million people on Baht 50 billion government budget, the existing registered people in the system shows over 23.4 million but bearing in mind the applicants’ qualifications which will be double-checked again. It is forecasted that about 9 million people who have already registered are eligible for the financial aid.