Thailand to borrow US$1.7b locally to boost economy

[BANGKOK] Thailand expects to borrow 57 billion baht (S$2.39 billion) domestically for road and water projects, instead of taking out foreign loans as previously planned, the finance minister said on Wednesday.

The army seized power in May to end months of political turmoil, but the junta has struggled to spur Southeast Asia's second-largest economy. Weak exports and subdued domestic demand has put pressure on the junta to speed investment spending to boost growth.

"The 57 billion baht will likely be borrowed domestically as financial costs are lower. But we will not borrow immediately because the projects have yet to start," Sommai Phasee told reporters.

It will take four to five weeks to select companies to undertake these projects, he said.

Last week, the cabinet approved the borrowing plan, which would be in foreign currencies before being swapped into baht.

The loan is part of a plan to borrow about 80 billion in this fiscal year, ending on Sept 30, and next.

The economy grew only 0.7 per cent last year, its weakest pace since flood-hit 2011.

For 2015, the government expects 4 per cent growth, while the central bank last week cut its economic growth projection to 3.8 per cent from 4.0 per cent as government spending and exports remain weak and consumption sluggish.

REUTERS