Bangkok (VNA) - Thailand approved a 12.2 billion USD emergency borrowing package on May 5 to cushion the economic impacts of the Middle East tension, marking one of the country's largest borrowing plans in decades.
The cabinet said the funding would be used to boost domestic spending and ease economic hardships as inflation rises and growth slows, with the finance ministry last week cutting its GDP growth forecast to 1.6%, from 2.4% last year.
The loan of about 400 billion THB (12.21 billion USD) will be deployed from June to September, and include aid for more than 20 million low-income people under the government's "Thais Helps Thais" scheme to ease living costs.
It will also be used to support alternative energy, Finance Minister Ekniti Nitithanprapas said at a news conference after a cabinet meeting.
Meanwhile, Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas said part of the funds would also support renewable energy.
The conflict in the Middle East, which began in late February, has disrupted global energy markets, driving up prices of oil and gas, maritime transport and consumer goods. Observers say the newly approved package is among the largest borrowings by Southeast Asia’s second-largest economy in recent years, though still below levels seen during the Asian Financial Crisis and the COVID-19 period.
Ekniti noted that public debt stood at 66.38% of GDP as of March, below the 70% ceiling, and the new borrowing would remain within this limit. Core inflation is projected to reach 3% this year, a sharp increase from the earlier estimate of 0.3%./.
Foreign investment in Thailand surges in Q1
According to Thailand's Board of Investment (BOI), the combined value of the 624 project applications submitted during the January-March period was roughly 2.4 times the value recorded in the same period last year, reflecting strong foreign interest despite global economic volatility.
