Thailand ready to issue emergency decree for 'big' economic stimulus as recession looms

A member of the Royal Thai Police takes a food delivery rider's temperature at a checkpoint on the outskirts of Bangkok, on March 26, 2020.
A member of the Royal Thai Police takes a food delivery rider's temperature at a checkpoint on the outskirts of Bangkok, on March 26, 2020.PHOTO: AFP

BANGKOK (REUTERS) - Thailand will have a “big scheme” to help stimulate the economy ravaged by the coronavirus outbreak that has infected more than 1,000 in the country. 

The finance ministry has been asked to plan the scheme, which will focus on preserving jobs over the next two to three months, Mr Somkid Jatusripitak told reporters after a meeting with the finance minister and the central bank governor. 

"Most economic activity has stopped as people have been asked to stay home to curb the spread of the virus,” Mr Somkid said. “The government must try to end the outbreak as soon as possible, so the economy can quickly recover. The later, the more difficult.” 

The size of the stimulus has yet to be decided but the government is ready to issue an emergency decree to borrow funds, he said.

“The figures are no limitation for the finance ministry”. 

The government recently introduced a series of stimulus measures worth billions of dollars to cushion the virus impact on Southeast Asia’s second-largest economy which is heading into a recession. 

The coronavirus outbreak has badly damaged both tourism and domestic consumption, two key drivers of expansion, amid restrictions to curb the spread of the disease known as Covid-19. 

Thailand on Friday reported 91 new cases of infections and one death, taking the total to 1,136 and five, respectively. 

A state of emergency took effect on Thursday, with entry of non-resident foreigners banned. 

The Bank of Thailand (BOT) also introduced steps to support the financial markets, and last week made a surprise rate cut to a record low of 0.75 per cent. 

On Wednesday, the BOT left its policy rate steady but slashed its growth forecast this year to a 5.3 per cent contraction from 2.8 per cent growth seen earlier. 

BOT Governor Veerathai Santiprabhob said on Friday monetary policy was not a targeted measure as fiscal policy in helping the economy. 

Even before the outbreak, the trade-reliant economy has been hurt by declining exports amid global trade tensions, sluggish investment and a drought. Last year’s growth was 2.4 per cent, the weakest pace in five years.