The package was approved in a meeting of the Council of Economic Ministers, led by Prime Minister Prayut Chan-o-cha, and will be forwarded to the cabinet for approval on Tuesday.
After the meeting, Prayut said the package, lasting two months, will be “temporary assistance.” It includes a wide range of measures such as financial aid for small-and-medium-sized enterprises (SMEs), tax benefits and other financial policies.
The massive package comes as Thailand’s economy, already in the doldrums for several years due to weakening exports, low investment and more recently, the strengthening baht, is slumping further. The coronavirus outbreak is rubbing salt in the wound, directly hitting the tourism sector, long considered the only lifeline for the beleaguered economy.
Deputy Prime Minister Somkid Jatusripitak admits that the virus has dealt a severe blow to tourism as well as the manufacturing and services sectors.
“The Bank of Thailand has been working with other relevant agencies to roll out the first set of measures to different groups. It is particularly important to help SMEs to prevent further impacts on workers. This is the first set of measures, and there will be more later.”
Finance Minister Uttama Savanayana says the package includes cash handouts, soft loans and other financial assistance, as well as tax benefits, to help both entrepreneurs and the public.
“It’s a temporary, broad-based package to help various sectors.”
For businesses, the package provides soft loans at a 2% interest rate, a debt moratorium and delayed debt repayment, debt restructuring for non-performing loans, lower utility expenses and other costs.
To expedite soft loans, the Government Savings Bank will lend funds to commercial banks at 0.01%, so commercial banks can give loans at 2%.
In addition to this, the package will cover a 2,000-baht handout to low-income earners, farmers and freelance workers at 1,000 baht over two consecutive months.
Bank of Thailand governor, Veerathai Santiprabhob, says the central bank has issued a memo calling on commercial banks to ease debt restructuring criteria under the relief package. The central bank has also called on commercial banks to lower the minimum payment limit for credit card holders to 5% from the 10% ceiling.
Kobsak Pootrakool, secretary to the economic cabinet, says the ministers are also prepared to roll out measures to help airlines and retailers who rent airport space.
He says ministers estimate that the effect of the coronavirus outbreak will last for another six months, and an additional three months will be needed to restore public confidence.
He adds that the economy’s performance in the first quarter will not be positive, as the outbreak has alread slashed the number of foreign arrivals by 50%.
Economic growth stood at 2.4% last year, the weakest in five years, and growth this year is likely to be much lower. Kasikorn Research Centre predicts GDP expansion of just 0.5% mainly because of the outbreak.
SOURCE: Bangkok Post
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