The Thai government said on Tuesday that it will pass a third economic relief package with a budget worth around 1.9 trillion baht (US$57.99 billion) to help the economy see through the coronavirus crisis.
The government previously passed two economic relief packages in March, which is expected to inject more than 517 billion baht into the Thai economy already.
However, according to various institutions including the Bank of Thailand (BOT), the economy is expected to fall into recession and contract by 5.3 per cent.
The new stimulus package will utilize 80-100 billion baht from the government budget as well as include a soft loan policy of more than 900 billion baht from the central bank. Additionally, the cabinet also approved an emergency loan decree worth 1 trillion baht.
Prime Minister Prayut Chan-o-cha said of the 1 trillion baht loan, around 600 billion baht will be set aside to support the healthcare sector and individuals that have been affected by the outbreak.
Another 400 billion baht will be used to support the economy.
“We will have more than 1 trillion baht from the emergency loan and the reallocated government budget,” he said. “The next step is to finalize the emergency loan decree which is expected to come into effect by June.”
According to the government, 600 billion baht budget will be set aside to support the farmers, citizens and the healthcare sector for six months.
This means that the 5,000 baht handout scheme to support 9 million workers within the informal work sector could increase from three to six months.
400 billion baht will go towards the economy in order to strengthen economic activity and investment of infrastructure at a community level.
The BOT is to provide a direct soft loan with an interest rate of 2 per cent. It would only be for new SME loans with a limit of no more than 500 million baht per loan. The budget for the soft loan was set at 500 billion baht.
Listed companies are, however, ineligible for the scheme. The initial estimation is that around 1.7 million businesses will be eligible for the soft loan.
Commercial banks and SFIs (special financial institutions) are to postpone principal and interest rate payments for six months for SMEs that took out a loan less than 100 million baht.
The government will also be setting up a Corporate Bond Liquidity Stabilization Fund or BSF to allow the BOT to buy private bonds with a credit rating no less than an investment grade.
Bonds that are considered to be of an investment grade have a low risk of default. 400 billion baht was set aside for this endeavor.
The government said to help fund its program, it would reallocating funds from the government fiscal budget for 2020. The aim is to come up with a budget of around 80-100 billion baht to be used before the emergency decrees comes.
Other measures approved by the Cabinet on Tuesday:
- All schools and universities will remain closed. The first academic term for 2020 will be moved from May 16 to July 1. Any school or university that wishes to open before the designated date has to ask for permission from the Ministry of Education.
- To support social distancing, the government has decided to increase the amount of free electricity from 50 units up to 90 units per month for households with an electric meter of no larger than 5 ampere. Electricity payment for such households will also be extended by six months without any penalty. The bill will start in April.
