Thailand puts on hold big borrowing plan to repay debt

[BANGKOK] Thailand has shelved a plan to introduce a law enabling the government to raise nearly US$20 billion of new debt to repay existing debt, the finance minister said on Thursday, a move that could ease concerns about government bond supply.

"Passing a law to create new debt to to repay old debt, the debt remains the same. So there is no need to do it, for now," Dinance Minister Apisak Tantivorawong told reporters.

"But officials are still studying it and we can still do it if need be," said Mr Apisak, who was appointed finance minister last month in a cabinet reshuffle.

In May, Theeraj Athanavanich of the finance ministry's public debt management office said the ministry planned to propose a special law to allow the government to borrow around 700 billion baht (US$19.6 billion) to repay debts arising from state enterprises and the controversial rice buying scheme of a previous government. The plan rested on issuing new government bond issues and short term loans.

Southeast Asia's second-largest economy is struggling for growth as exports and domestic demand both remain weak. The finance ministry expects economic growth of 3 per cent this year after 0.9 per cent last year.

REUTERS