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The opposition Puea Thai Party who submitted the motion to the court had argued that the executive decree by Prime Minister Abhisit Vejajjiva's government violated the constitution because it was not an emergency matter.

The Court however said said the decree was necessary and concerned an urgent matter.

Prime Minister Abhisit Vejjajiva earlier said that the loans would raise funds for a new stimulus package that would create 2 million jobs over the next three years.

He said the loans would offset a revenue shortfall and to fund its economic stimulus package.

Finance Minister Korn Chatikavanij earlier had testified to the court on the urgency to issue the executive decree after the opposition Puea Thai Party petitioned the court seeking a ruling as to whether the decree had violated the charter or not.

Korn had earlier said the government is confident the situation is urgent enough to warrant issuing the decree as the country's economy shrank 7.1 percent in the first quarter of 2009, from a year earlier.

The finance minister questioned the opposition's intentions in seeking a court ruling on the issue.

He also warned that if the government couldn't press ahead with the plan, the country's economy would be in tatters.

The ministry conceded the revenue shortfall has caused its borrowing to almost hit the legal ceiling.

It is expected the ministry to suffer a Bt280 billion shortfall in tax collections in the current fiscal year ending in September. Of the total borrowings, some Bt200 billion will be allocated to fill the state coffers and investment in infrastructure projects.