Thailand To Borrow Bt270 Billion To Boost Economy

[george]

Thailand to borrow Bt270 billion to boost economy

BANGKOK: -- Thai Finance Minister Korn Chatikavanich said on Saturday he would seek Cabinet approval Tuesday for a plan to borrow Bt270 billion from domestic and international lending agencies in an attempt to stimulate the Thai economy amid the current global downturn.

The sum will be sought to bolster liquidity at state banks and firms so they could provide more funding and extend credit facilities for varied manufacturing and exporting sectors.

Of that sum, an estimated Bt70 billion will be borrowed from the Asian Development Bank, the Japan International Cooperation Agency (JICA) and the World Bank, the finance minister said.

The Bt270 billion loans will be injected into the country's economic mechanisms and add to the government's mid-year economic stimulus package which recently won approval in the first reading of the House of Representatives.

Eight state banks and financial institutes, including the Small and Medium Enterprise Development Bank of Thailand (SME Bank) and the Bank for Agriculture and Agricultural Cooperatives will be instructed to extend credit lines for their customers such as exporters and small- and medium-sized entrepreneurs.

The finance minister dampened fears that the government might be running out of cash to cover regular expenditures -- including the monthly payroll for government personnel nationwide, given an untapped sum of only about Bt52 billion currently left in the state coffers.

Mr. Korn said the government will collect a sizeable sum of revenue from corporate income tax around the middle of this year in addition to the sought-after loans.

-- TNA 2009-02-01

[chuang]

Thailand to borrow Bt270 billion to boost economy

--

Hope the politicians would keep their hands clean if Thailand gets the loan....

[Gertrude]

Thailand to borrow Bt270 billion to boost economy

BANGKOK: -- Thai Finance Minister Korn Chatikavanich said on Saturday he would seek Cabinet approval Tuesday for a plan to borrow Bt270 billion from domestic and international lending agencies in an attempt to stimulate the Thai economy amid the current global downturn.

The sum will be sought to bolster liquidity at state banks and firms so they could provide more funding and extend credit facilities for varied manufacturing and exporting sectors.

Of that sum, an estimated Bt70 billion will be borrowed from the Asian Development Bank, the Japan International Cooperation Agency (JICA) and the World Bank, the finance minister said.

The Bt270 billion loans will be injected into the country's economic mechanisms and add to the government's mid-year economic stimulus package which recently won approval in the first reading of the House of Representatives.

Eight state banks and financial institutes, including the Small and Medium Enterprise Development Bank of Thailand (SME Bank) and the Bank for Agriculture and Agricultural Cooperatives will be instructed to extend credit lines for their customers such as exporters and small- and medium-sized entrepreneurs.

The finance minister dampened fears that the government might be running out of cash to cover regular expenditures -- including the monthly payroll for government personnel nationwide, given an untapped sum of only about Bt52 billion currently left in the state coffers.

Mr. Korn said the government will collect a sizeable sum of revenue from corporate income tax around the middle of this year in addition to the sought-after loans.

-- TNA 2009-02-01

There is no need to borrow so much, a simple devaluation of the baht would bring immediate results.

[Scott]

I thought they were sitting on large amounts of foreign reserves. Why do they need to borrow money?

[Japhrodisiac]

They are sitting on over 100 billion USD by all accounts in reserves, not counting baht reserves as well. The Revenue dept must also have quite a treasure trove collected over the past 2 or more years with unstable govenrnments and little spending on infrastructure or other programs. Seems a better idea to slowly devalue the baht as the above poster mentions...

[lannarebirth]

Is there information available as to which currency they will be borrowing in? I hope it's Baht this time.

[jimbeam1]

Is there information available as to which currency they will be borrowing in? I hope it's Baht this time.

Hi,

I read on MSN that they were going to the World bank, to ask for 2 Billion US Dollars.

jb1

[tijnebijn]

Don't count on it . That female person at the top of BOT admitted resently she doesn't mind

a strong baht . She stated that having a strong currency gives confidence to investors , and a weak

currencie isn't ...... really unbelievable mindblowing this person still got the top job .

There really should come a new colour shirt protest so people can keep their jobs and demand a devaluation ,

what colour would will it be ?

[hansnl]

I thought they were sitting on large amounts of foreign reserves. Why do they need to borrow money?

And that is the 270 Billion Baht question.

Devaluation would be the answer, if the reserves were less.

But now the solution seems to be a slowdown of the economy eating up all the reserves.

And that means a lot of trouble for the not so rich 80% of the Thai population.

[Scott]

It would seem that with the world economy the way it is, that international lending institutions would not want to lend money to a country that has sufficient reserves. Surely the money is needed in other countries with greater problems. I am not an economist, so I may be asking a stupid question.

[jamesjdaly]

Why borrow 270 billion when you can have Toxin's 76 billion for nothing?!!!

[noahvail]

There really should come a new colour shirt protest so people can keep their jobs and demand a devaluation ,

what colour would will it be ?

How about my favourite colour - plaid!!!

[SmugFarangBore]

Mercedes-Benz will be gearing up for a busy year in Thailand.

[jubby]

I can't understand why in the current world economic situation where Fear and panic rules ; would a country attract attention to itself by borrowing anything from anywhere if they really don't need to. Surely it'll attract some negative attention. Somethings amiss here

[Journalist]

Given that Thaiand is running both a current account deficit and has a negative trade balance, I don't see how the confluence of the measures recommended above could work.

- if they sell their foreign exchange reserves for baht, that makes the baht stronger, and a weaker, devalued baht is necessary to prop up exporters, which is the sector at present that is most endangered.

So I think borrowing is fine in the circumstances if they want to, say, build some infrastructure (though there will be a time lag before it has any meaningful effect). They have the wherewithal to repay later.

[HankChinasky]

Some of the replies in that thread makes me think of:

Bitter Expat Predicts Thai Economic Collapse for 10th Straight Year

Non-Thai speaking bar owner “absolutely certain” that this time he’s right about everything

YASOTHON – Long-time Thailand resident and chronic pessimist Robert Arnold celebrated his 10^th consecutive year of portending the imminent doom of the country with a long, dissembling rant to no one in particular on Sunday night at his Yasothon bar. The 56-year old expatriate and owner of multiple failed small business ventures spent 45 minutes telling seven different uninterested people his various conclusions encompassing themes such as “This whole place is falling apart,” “These people have no clue how to run a country,” and “I should write a fuc_king book.” For the 482nd consecutive time he concluded that the nation was destined for complete economic ruin as a direct result of its citizens not heeding his freely dispensed and infallible advice.

Arnold, whose own entrepreneurial history includes three bankruptcies and a disastrous foray into the Stock Exchange of Thailand in 2001, has plenty of advice for the Kingdom’s financial captains. “The taxes are way too high,” he insists, despite having avoided paying 40% of his legal obligation through the clumsy laundering and under-reporting of his own meager profits. “They make it impossible to run a business with all their dumb rules and regulations.” Arnold also criticizes the government for having allowing the baht to appreciate in 2007, which severely devalued his cash reserve of US$15,000 which he bought with baht in 2005 at the exchange rate of 41.5/1, citing at the time “next year’s collapse of this worthless currency” and “the rock-solid safety of the almighty dollar.”

Sunday’s tirade, which was alternatively directed towards two unresponsive Israeli backpackers at the bar, Arnold’s third wife Pun, a newly recruited non-English speaking bar waitress named Nong, and an unconscious Vietnam War veteran whose name could not be verified at press time, marks exactly ten entire years in which Arnold has been offering his sage observations to an unappreciative public, including 539 letters to the Bangkok Post, 129 of which have been published. Having previously blamed society’s ills on corrupt politicians, clueless bureaucrats, inferior Western culture, inferior Eastern culture, the IMF, Warren Buffett, liberal media bias, rabid soi dogs, Islamist fascism, Thaksin Shinawatra, and all Caucasian women, Arnold is proud of his role as a watchdog and seer.

“I’ve been around a long time,” he explains, “and I’ve learned a lot,” possibly referring to his associate’s degree from the Community College of Akron in 1972. “I got common sense, which these (Thai) people could use, and I make the connections that no one else sees.” The twice-divorced, bitterly unhappy American with deeply repressed maternal hostility also notes: “I really understand human nature.” The herpes-infected, serial-philandering, borderline alcoholic tax-evader also loves to quote famous authors whose books he has not actually read to illustrate his points. “Live not by lies,” he says often. “Solzhenitsyn. Goddamn right.”

Despite having been wrong about everything Thai-related since 1999, including predicting a drop in tourist arrivals following new visa restrictions, a major terrorist bombing in Nana Plaza “by the end of 2005,” an assassination within the Royal family, the “impossibility” of a coup in September 2006, and the total mechanical failure of Suvarnabhumi Airport’s runways, Arnold remains convinced in his own insight and powers of prophecy. “The economy is going to collapse,” he insisted, this time caused by “the housing bubble in Bangkok, Chinese-engineered biological warfare, and Obama’s tax plan.” Regarding previous failed predictions of economic meltdown to be caused by corruption, the coup, the 2006 election, the 2007 election, the enforcement of 2am closing times, two-tier pricing, the indoor smoking ban, and the ridiculous price of TRUEvisions cable TV, Arnold simply said, “You’ll see.”

Not the Nation

[Ricardo]

Don't count on it . That female person at the top of BOT admitted resently she doesn't mind

a strong baht . She stated that having a strong currency gives confidence to investors , and a weak

currencie isn't ...... really unbelievable mindblowing this person still got the top job .

There really should come a new colour shirt protest so people can keep their jobs and demand a devaluation ,

what colour would will it be ?

Amazing that Khun Tarisa still thinks this, with half a million jobs gone in the past 3 months, and exporting-factories shutting-down left, right & centre. As if Thailand wants or need overseas investors. Time for a new BoT governor, methinks.

[cclub75]

They are sitting on over 100 billion USD by all accounts in reserves, not counting baht reserves as well. The Revenue dept must also have quite a treasure trove collected over the past 2 or more years with unstable govenrnments and little spending on infrastructure or other programs. Seems a better idea to slowly devalue the baht as the above poster mentions...

Check your sources.

-there is no "treasury"... for one very good reason : the thai gvt (Junta, Samak, Somchai and now Abhisit) is running budget deficit since several years. Gifts for friends, inane economic policies and subsidies cost a lot.

It's documented.

-furthermore, tax collections are decreasing (VAT, but also corporate taxes, personal income etc.)

http://thaicrisis.wordpress.com/2009/01/31...ll-in-december/

-and the reserves of the Bank Of Thailand are not made to pay the day to day expenses of the government...

[dotcom]

It's like the country has an AMEX card.

Go order the most expensive meal on the menu & at the end flip the waiter some plastic & excitedly yell "Charge It". hel_l add $100 tip.

They have learned well from the masters at the Federal Reserve.

[animatic]

Thailand to borrow Bt270 billion to boost economy

BANGKOK: -- Thai Finance Minister Korn Chatikavanich said on Saturday he would seek Cabinet approval Tuesday for a plan to borrow Bt270 billion from domestic and international lending agencies in an attempt to stimulate the Thai economy amid the current global downturn.

The sum will be sought to bolster liquidity at state banks and firms so they could provide more funding and extend credit facilities for varied manufacturing and exporting sectors.

Of that sum, an estimated Bt70 billion will be borrowed from the Asian Development Bank, the Japan International Cooperation Agency (JICA) and the World Bank, the finance minister said.

The Bt270 billion loans will be injected into the country's economic mechanisms and add to the government's mid-year economic stimulus package which recently won approval in the first reading of the House of Representatives.

Eight state banks and financial institutes, including the Small and Medium Enterprise Development Bank of Thailand (SME Bank) and the Bank for Agriculture and Agricultural Cooperatives will be instructed to extend credit lines for their customers such as exporters and small- and medium-sized entrepreneurs.

The finance minister dampened fears that the government might be running out of cash to cover regular expenditures -- including the monthly payroll for government personnel nationwide, given an untapped sum of only about Bt52 billion currently left in the state coffers.

Mr. Korn said the government will collect a sizeable sum of revenue from corporate income tax around the middle of this year in addition to the sought-after loans.

-- TNA 2009-02-01

There is no need to borrow so much, a simple devaluation of the baht would bring immediate results.

YES,

LIKELY REGIONAL TIT FOR TAT COMPETATIVE DEVALUATIONS.

And endless spiral of local governments trying to out devalue their neighbors...

[henryalleman]

270 billion Baht is no that much of money to boost economy. That's why I doubt it will have any efect on the economy, maybe if lucky, it can prevent a further collapse for a few weeks.

[h90]

Don't count on it . That female person at the top of BOT admitted resently she doesn't mind

a strong baht . She stated that having a strong currency gives confidence to investors , and a weak

currencie isn't ...... really unbelievable mindblowing this person still got the top job .

There really should come a new colour shirt protest so people can keep their jobs and demand a devaluation ,

what colour would will it be ?

that's not stupid in the long term, when investor can trust in a currency. I hold half of my funds in Thai Baht.

If the Baht gets weaker, I'll move out all the money and sure many people think like that.

(Actually I don't trust the Baht very much but as well I don't trust the USD and Euro)

[Merangue]

Don't count on it . That female person at the top of BOT admitted resently she doesn't mind

a strong baht . She stated that having a strong currency gives confidence to investors , and a weak

currencie isn't ...... really unbelievable mindblowing this person still got the top job .

There really should come a new colour shirt protest so people can keep their jobs and demand a devaluation ,

what colour would will it be ?

that's not stupid in the long term, when investor can trust in a currency. I hold half of my funds in Thai Baht.

If the Baht gets weaker, I'll move out all the money and sure many people think like that.

(Actually I don't trust the Baht very much but as well I don't trust the USD and Euro)

So you are going to wait until the Baht gets weaker then sell your baht? Impressive reasoning that.

[selftaopath]

Thailand to borrow Bt270 billion to boost economy

Hope the politicians would keep their hands clean if Thailand gets the loan....

Isn’t it reasonable to believe the government and Thai people WOULD/COULD benefit if various funds did not go to corrupt individuals? Ah, but might that be too logical? TIT

[toybits]

And when the government can't pay for the loan - who they gonna called? Mr. T?

[Seneque]

The problem is : there is no clarity in the state of finances in Thailand.

One day "we will not be affected by the economic meltdown", another day "the government is running out of funds", at the central bank they say "a strong baht is good enough for the economy", exporters claim " the ever stronger baht is killing us" ...

Borrowing 270 billions baht to boost what ?

Everyone has his own reasons, and it is business as usual with no planning, no anticipation, basically no clear cut policy.

With such inconsistencies, for those who wish the devaluation of the baht ... they might have good new sooner rather than later.

[Naam]

Given that Thaiand is running both a current account deficit and has a negative trade balance, I don't see how the confluence of the measures recommended above could work.

- if they sell their foreign exchange reserves for baht, that makes the baht stronger, and a weaker, devalued baht is necessary to prop up exporters, which is the sector at present that is most endangered.

So I think borrowing is fine in the circumstances if they want to, say, build some infrastructure (though there will be a time lag before it has any meaningful effect). They have the wherewithal to repay later.

postings like yours encourage thoughts that there are still people around which can sort out fact from fiction. thanks!

[yeti]

Well, Korn admits that the treasury reserve dropped to Bt52 billion.

And the government spends Bt 66 billion every month for the salary of its employees.

So they need the money, and they need it fast.

Edited February 2, 2009 by yeti

[ballpoint]

Don't count on it . That female person at the top of BOT admitted resently she doesn't mind

a strong baht . She stated that having a strong currency gives confidence to investors , and a weak

currencie isn't ...... really unbelievable mindblowing this person still got the top job .

There really should come a new colour shirt protest so people can keep their jobs and demand a devaluation ,

what colour would will it be ?

What a way with words.

[henryalleman]

Well, Korn admits that the treasury reserve dropped to Bt52 billion.

And the government spends Bt 66 billion every month for the salary of its employees.

So they need the money, and they need it fast.

Way back in 1991 or 1992 there was an article in BKK Post (that Thailand where they proclaimed that Thailand had too much civil servants, a figure of around 800.000 was mentioned. That moment they give a warning that this will create some huge financial problems in the future.

A few years ago the government made a new rule that new civil servants will not get a government pension anymore. So regarding all of this, its not so unrealistic to presume that there could be a problem with the payment of the salaries for civil servants.