Govt weighs THB500bn emergency borrowing amid mixed signals

Deputy Prime Minister Pakorn Nilprapunt said on Monday (April 20) that the government was considering issuing an Emergency Decree to authorise borrowing of up to THB500 billion to prepare for possible crises. He said the move was legally available under Section 172 of the Constitution for urgent situations involving security or the economy.

Pakorn said the urgency stemmed from tight Treasury reserves, mounting external uncertainty and the risk of wider economic disruption from both international conflict and Super El Niño, which could hit agricultural output. “In practice, the actual borrowing may not reach the full THB500 billion, but public debt management principles require the government to expand the ceiling to cover the full amount specified in law first,” he said.

Debt ceiling may need to be raised

Pakorn said the government could also pursue a budget transfer bill in parallel to free up additional funds for crisis response. But any borrowing under the proposed decree would first require the public debt ceiling to be lifted above the current 70% of GDP, with Thailand’s debt ratio now standing at about 66%, leaving fiscal space increasingly tight. Reuters reported on April 15 that Finance Minister Ekniti Nitithanprapas said the government had not yet decided whether to raise the internal debt ceiling.

Oil Fuel Fund guarantee still under review

Pakorn also addressed a separate proposal for an Emergency Decree that would allow the Finance Ministry to guarantee THB150 billion in borrowing for the Oil Fuel Fund. He said the fund was originally designed as a short-term stabilisation tool and, in principle, should hold revolving liquidity of only THB20 billion to THB40 billion. Instead, it has been used for prolonged price subsidies beyond its original purpose, pushing accumulated debt above THB100 billion. If more liquidity is needed later, the government will review both the legal framework and the fund’s condition again in line with economic conditions and future energy costs, he said.

Pakorn’s remarks came after Lavaron Sangsnit, permanent secretary for finance, said earlier on Monday that rumours of an Emergency Decree authorising several hundred billion baht in borrowing to tackle the energy crisis and support stimulus measures were unfounded. He said the ministry had not been instructed to prepare for such a measure and was unaware of any concrete plan. On the separate proposal for a state guarantee for the Oil Fuel Fund, Lavaron said the Energy Ministry had submitted the matter, but falling global oil prices meant there was no need for a guarantee at this stage. “Management at the moment has to be based on the situation,” he said.

What Section 172 allows

Section 172 of Thailand’s Constitution allows an Emergency Decree to be issued for national or public safety, national economic security, or to avert public calamity. Once issued, it must then be submitted to the National Assembly without delay at its next sitting. Pakorn is listed by the Royal Thai Government as a deputy prime minister, while Lavaron Sangsnit remains Permanent Secretary for Finance.