Outgoing Prime Minister Abhisit Vejjajiva has warned the Pheu Thai-led government about the perils of inflation if it borrows hundreds of billions of baht to finance its policies.
Mr Abhisit, who gives a farewell televised speech to the nation tonight, yesterday urged his successor to move carefully in taking out loans as the country does not need a huge amount of money right now to stimulate its economy.
Thailand needs to be cautious about potential global economic and domestic inflation, he said.
“Pheu Thai is not talking about an economic stimulus policy, but a capital increase [for people’s pockets] policy. This will put the people at risk of expensive goods and inflation,” Mr Abhisit said.
“The world is already concerned about inflation.”
Mr Abhisit was responding to media reports citing Pheu Thai’s economic team which said the new government needed a total of 1.85 trillion baht to mount 13 major policies which the party promised to voters during its campaign.
The party reportedly plans to borrow 635 billion baht from domestic sources and 199 billion baht from overseas.
About 742 billion baht will come from the state coffers and 277 billion baht from joint investments with the private sector.
Mr Abhisit said the government has to consider whether it is worth pouring money into some of its projects. The controversial idea of land reclamation in the sea off Bangkok, Samut Prakan and Samut Sakhon to fight coastal erosion had raised many questions, he said.
Mr Abhisit will give his last address to the public as premier at 8.30pm tonight via the TV Pool.
He will talk about potential problems, especially the higher cost of living, that the Pheu Thai-led government is likely to encounter.
Meanwhile, Thailand’s likely first woman prime minister Yingluck Shinawatra sent her best wishes to Mr Abhisit, who yesterday celebrated his 47th birthday.
Calling herself a “freshy” in politics, Ms Yingluck said she hoped to work with Mr Abhisit constructively.