The governor of the Bank of Thailand (BoT) has called for an additional 1 trillion baht in government spending to counter coronavirus, saying the blow to the economy from the pandemic is greater than from the Asian financial crisis in 1997.
The government can fund additional spending by borrowing more, BoT Governor Sethaput Suthiwartnarueput said Monday at a briefing in Bangkok. Even if public debt tops 70% of gross domestic product by 2024, that would be manageable given high domestic liquidity, low borrowing costs and the country’s current-account surplus, he said.
“Additional state borrowing will help support GDP’s growth potential to revive at a faster rate, and will lower the debt-to-GDP ratio in the long run,” Mr Sethaput said. “If the government doesn’t quickly provide additional economic support during a time of high uncertainty and to shield against a prolonged crisis,” public debt will remain at a high level and will be difficult to lower in the long run.