BANGKOK: The Thai government has approved a stimulus package expected to inject 400 billion baht into the economy to reduce the impact of the Covid-19 epidemic.
Prime Minister Prayut Chan-o-cha said the package was a first phase measure that could be followed by second phase action if the impact persists.
Finance Minister Uttama Savanayana hoped the stimulus package will ease conditions for the public and businesses reeling from the impact of the virus.
The Bangkok Post said the package will inject an estimated 400 billion baht into the economy in a bid to return growth to positive territory.
The short term measure will last for a few months, after which the Covid-19 situation will be assessed again.
According to the Finance Ministry, the package will cover all sectors since it will benefit 14.6 million low-income earners who account for 22 per cent of the population, a total of 50,000 village funds nationwide, 7.2 million farming households and three million small and medium enterprises (SMEs) or 99 per cent of all business enterprises.
The package is expected to create 14 million jobs or about 85 per cent of all employment nationwide.
It will also provide assistance to the general public and to SME entrepreneurs.
It includes soft loans worth 150 billion baht, which the Government Savings Bank (GSB) will lend to commercial banks at an interest rate of just 0.01 per cent, so commercial banks can grant loans at two per cent.
Each bank borrower can take out a loan of no more than 20 million baht.
The package also includes a moratorium on principal payments, debt payments extension, and the right to borrow from special financial institutions such as the GSB and the Bank for Agriculture and Agricultural Cooperatives.
The Bank of Thailand (BoT) will also allow SMEs and general customers who are bank debtors to undergo debt restructuring without any stain on their credit history.
Other measures include easing debt classification criteria to help virus impacted debtors, and giving banks more flexibility to approve loans in order to give debtors sufficient liquidity.
The BoT has also called on commercial banks to lower the minimum payment limit for credit card holders to five per cent from the 10 per cent ceiling.
Meanwhile, the Social Security Office (SSO) has rolled out measures to promote employment, including 30 billion baht in soft loans starting at three per cent interest for SSO-registered entrepreneurs.
Uttama said the government will reduce withholding tax from three per cent to one per cent from April to September.
SMEs can also use expenses incurred by salary payments from April to July to claim deductions of up to three times to spur employment.
In a move to restore capital market confidence, the government will invest more than 65 per cent of the Super Savings Fund (SSF) in companies listed on the Stock Exchange of Thailand, and will offer higher tax benefits to attract more public investment in the SSF.