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Thailand says new economic measures to ease virus impact worth 10% of GDP

Published 04/03/2020, 05:12 AM
Updated 04/03/2020, 05:15 AM
© Reuters. Thailand's Deputy Prime Minister Somkid Jatusripitak speaks during a seminar on fintech in Bangkok

By Orathai Sriring and Satawasin Staporncharnchai

BANGKOK (Reuters) - Thailand's new package of economic measures to mitigate the impact of the coronavirus outbreak will be worth about 10% of its gross domestic product (GDP), Deputy Prime Minister Somkid Jatusripitak said on Friday.

The package will cover all economic sectors for at least the next six months, the minister told a news conference after a special cabinet meeting.

"The figure will be like those of other countries, close to 10% of GDP," he said, adding other details were being worked on by relevant agencies.

If possible, final approval will be sought from the cabinet on Tuesday, Somkid said.

The minister did not give a dollar value for the package, but the GDP of Southeast Asia's second-largest economy last year was 16.88 trillion baht ($512.76 billion).

The measures will be partly financed by the fiscal budget and borrowing, he said.

"This will build the confidence of people and businesses that we will get through this crisis".

The government will keep introducing measures to help the economy, he said.

The latest package follow last month's two sets of stimulus measures together worth more than 500 billion baht.

Thailand has reported 1,978 infections and 19 deaths because of the coronavirus.

It imposed a nationwide night curfew from Friday, after closing malls, beauty salons and arcades to limit the spread of the virus.

The Bank of Thailand (BOT) expects the economy to contract 5.3% this year, the worst since the 1998 Asian financial crisis.

The BOT is seeking a law to provide soft loans directly to struggling businesses, similar to a move many years ago when there was bad flooding, Governor Veerathai Santiprabhob told the conference.

The central bank will also seek a law to allow it to buy good quality corporate bonds that are being rolled over to support the 3.5 trillion-baht corporate debt market, he said.

It will buy at most half of the debt being rolled-over, he said.

The BOT also plans to lower the amount that commercial banks pay into the Financial Institutions Development Fund (FIDF) for two years to 0.23% of deposits from 0.46%, so that banks can cut other interest rates to help businesses, he said.

© Reuters. Thailand's Deputy Prime Minister Somkid Jatusripitak speaks during a seminar on fintech in Bangkok

The BOT will extend deposit protection of 5 million baht for another year from August, he added.

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