3 replies to this topic

[TheYenta]

"The government will look to borrow 70 billion baht from multilateral agencies to help finance additional economic stimulus programmes in the fourth quarter, according to Prime Minister Abhisit Vejjajiva. The new foreign borrowing will be a "contingency bullet" for the economy in case existing spending outlined in the 2010 fiscal budget starting in October was not sufficient to prop up growth.

For 2009, the government hopes that the 350 billion baht in deficit spending under the current budget and 40 billion in tax holidays for homebuyers and businesses will help shore up growth and consumer spending.

. . .Most economists expect economic growth to slow to zero to 2% this year, down by more than half from the 4% growth projected for 2008. . . The current government has pushed the Interior Ministry to accelerate disbursement of 104 billion baht in unused funds held by local administrations. Authorities are also moving to improve monitoring systems to track the progress of spending by state agencies.

A new 116-billion-baht supplementary spending bill should also help the economy. Mr Abhisit said once approved, the government will fast-track items that do not need to pass normal disbursement procedures, such as an 18-billion-baht subsidy programme for student uniforms and textbooks. . .

Finance Minister Korn Chatikavanij meanwhile dismissed criticism by opposition members that the government's treasury funds had fallen to just 52 billion baht from 200 billion last September."

http://www.bangkokpost.com/business/econom...s-foreign-loans

[TheYenta]

It will be interesting to see if there's a quick effect on the Baht in the forex markets:

"The Cabinet has just approved massive domestic and foreign borrowings to finance investment of the state enterprises and new public projects to stimulate the economy.

The domestic tranche will amount to Bt200 billion, which represents short-term facility to ease the liquidity of the state enterprises. The government would like the state enterprises to play a key role in fresh investment to prop up the economy.

The foreign tranche will cover US $2 billion or almost Bt70 billion in overseas borrowings from the Asian Development Bank, the World Bank or the Japan Bank for International Cooperation. This overseas borrowings will help finance infrastructure projects that will not only create jobs but will also enhance Thailand's competitiveness in the longer term."

http://www.nationmultimedia.com/2009/02/03...ss_30094865.php

[Dick]

It will be interesting to see what kind of interest the government ends up paying on the 200 billion borrowed from Thai banks, versus the 70 billion borrowed from international lenders. The potential for conflicts of interest between government officials and the local banks is monstrous, especially when so many Thai banks have big and sometimes controlling stockholders among the Bangkok elite with their obvious government ties.

I just wonder if anyone will even make the figures public. TIT.

[Sylvan]

It will be interesting to see what kind of interest the government ends up paying on the 200 billion borrowed from Thai banks, versus the 70 billion borrowed from international lenders.

"The Confederation of Thai Labour Thursday urged the government to consider seeking a huge loan from the Social Security Office (SSO) for projects that will sustain the country's economy during the ongoing tough time. "Instead of borrowing Bt70billion from foreign countries, why doesn't the government turn to SSO?" the confederation's Chairman Manas Kosol said.

Currently, the Social Security Fund - managed by SSO has accumulated cash of over Bt500billion. This year, SSO is scheduled to invest about Bt150billion of the amount in government bonds, state enterprises and more with aim to achieve a return rate of at least five per cent.

Manas believed SSO would be able to give a lower interest rate to the government."

http://www.nationmultimedia.com/breakingne...l-security-fund