Thai MPs Back $60 Billion Stimulus to Counter Economic Slowdown

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Thailand’s parliament approved a 1.9 trillion baht ($60 billion) stimulus package to counter a recession but divisions emerged in the ruling coalition over how to monitor the program.

Lawmakers on Sunday voted in favor of bills authorizing 1 trillion baht of borrowing for government spending and 900 billion baht of steps by the Bank of Thailand. Two key parties in the ruling bloc supported opposition calls for stronger oversight of the program.

The parties, Bhum Jai Thai and Democrat, said a new panel is needed to monitor the spending, a step the bloc’s biggest member, Palang Pracharath, deemed unnecessary. The opposition argues Prime Minister Prayuth Chan-Ocha’s military-backed coalition of more than a dozen parties could fracture amid infighting stoked by the coronavirus-induced economic crash.

“This doesn’t necessarily imply the weakening of the coalition but signals ongoing internal negotiations,” said Titipol Phakdeewanich, dean of the faculty of political science at Thailand’s Ubon Ratchathani University. “The coalition’s goal is to win the next election, and it will likely stick together until then.”

Stimulus Package

The government’s 1 trillion baht of spending:

  • 555 billion baht for workers and farmers
  • 400 billion baht for the “grassroots” economy
  • 45 billion baht for health

Bank of Thailand steps:

  • Cheap funds for banks to extend 500 billion baht of loans to small and medium-sized firms
  • A 400 billion baht corporate bond stabilization fund for companies rolling over maturing debt

The government has a majority of just over 60 in the 500-seat lower house of parliament. The Bhum Jai Thai and Democrat parties account for about two-fifths of the ruling alliance.

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