Court's ruling widens Govt's borrowing room

The Constitution Court on Wednesday ruled that the two executive decrees comply with the Constitution's Article184, leaving the government with several bullets to finance its post-flood investment.

Economic stability and unavoidable urgency were cited as the reasons for the ruling.

The borrowing executive decree will allow the government to finance 32 long-term flood-protection plans, which require a total investment of about Bt360 billion. The decree empowers the Finance Ministry to borrow Bt350 billion in Baht or other currencies by June 30, 2013.

The second decree will give even more room for investment as the government need not to set aside a budget for principal and interest payment for the Financial Institutions Development Fund (FIDF), starting from the 2013 fiscal year.

In the 2012 fiscal year, Bt68.43 billion was set aside for the purpose. The amount accounted for 2.9 per cent of public expenditures in the year and 16.2 per cent of total investment budget.

According to the World Bank's preliminary estimate, the fourth-quarter floods caused damage of Bt1.4 trillion to the public and private sectors.