Wednesday, May 6, 2009

Thailand to borrow US$22.9b for stimulus

Funds will be used to invest in new infrastructure, as part of a so-called "Strong Thailand 2012" scheme. -AFP 

Wed, May 06, 2009

BANGKOK, May 6, 2009 (AFP) - Thailand's cabinet Wednesday endorsed plans to borrow 800 billion baht (US 22 billion dollars) to fund second a stimulus package of 1.4 trillion baht over the next three years, the finance minister said.

The borrowing - part of a so-called "Strong Thailand 2012" scheme - would be used to invest in new infrastructure to boost the chances of economic recovery, Korn Chatikavanij said.

"There is no better time to invest than now, because of low interest rates, falling oil prices and a surplus of liquidity," Korn told reporters.

"This scheme will alleviate economic problems and will create up to two million jobs by the end of 2012," he said.

He said the cabinet had approved plans to authorise the finance ministry to borrow 800 billion baht from local money markets to fund the projects, adding that the loan would not affect domestic interest rates.

Korn said 40 percent of the second phase of the stimulus package will go on logistical systems, 17 per cent will be spent on water resources, 10 percent on improvements in education and the rest on public health and tourism.

Thailand announced an initial 117-billion-baht stimulus package in January.

Prime Minister Abhisit Vejjajiva said last month that the economy was expected to shrink by more than five percent in the first quarter due to lower tourism revenue following months of political chaos.

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