Thailand to boost borrowing by 8% to US$78 billion to spur growth
THAILAND plans to raise government borrowing by about 8 per cent in the fiscal year starting October to aid economic growth, according to sources familiar with the matter.
About 1.1 trillion baht (S$43 billion), or 41 per cent of the total US$78 billion, will be fresh borrowing to mainly finance the budget deficit.
The rest has been earmarked for refinancing and restructuring of existing debt, said the sources, who declined to be identified as they are not authorised to discuss the information before it is made public.
The Public Debt Management Office held a meeting with bond traders and fund managers on Monday in Bangkok, according to the sources.
Jindarat Viriyataveekul, the finance ministry’s public debt adviser, declined to comment on the plan, saying that the information can be disclosed after the financing framework is approved by the debt management committee on Wednesday (Sep 18). While the panel can still tweak the plan, no major changes are likely, the sources said.
The government had targeted a 7.6 per cent increase in borrowing for the current fiscal year.
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Prime Minister Paetongtarn Shinawatra, who was sworn into office this month, highlighted the need for an urgent economic stimulus in her policy announcement last week.
She is seeking to boost South-east Asia’s second-largest economy that’s lagged its neighbours with an average 1.9 per cent growth rate during nearly a decade of military-backed rule.
Thailand’s local bonds have handed US dollar-based investors a 7 per cent return this year, outperforming most emerging-market (EM) peers. The baht also trumped most EM currencies, rising almost 3 per cent against the greenback.
About 1.3 trillion baht of the funding sought will be raised through government bond sales, while the rest will be financed via treasury bills, savings bonds, bond switches and promissory notes, the sources said. The government plans to raise spending by 4.2 per cent in the next fiscal year, with the budget deficit projected at 866 billion baht.
Paetongtarn, the youngest daughter of influential former leader Thaksin Shinawatra, was elected prime minister by parliament last month after her predecessor Srettha Thavisin was dismissed by a court over an ethical violation.
The government plans to auction no more than 322 billion baht of bonds during the October to December period, the sources said, compared with 306 billion baht in the previous three months. BLOOMBERG
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