Lending should be targeted at investment in modern industries, he said.

Priming the economy through liquidity lifelines to either businesses or households should be done cautiously, said Pridiyathorn, who has also served as governor of the Bank of Thailand.

If loans are given to businesses when they have no purchase orders, that is promoting indebtedness, he said.

An exception is if they are planning to invest in new, modern industries.

Now, there are no purchase orders, nor money, for the private sector.

“When businesses see declines in purchase orders, they may have to manage stocks properly without more borrowing.

“The government cannot encourage them to build up inventory. However, what they need is encouragement in planning modern industries,” he said.

If the global economy climbs on the recovery cycle in two years, Thailand will have modern industries in place to compete with others, he said.

It is also not proper during an economic downturn if the stimulus is made to accelerate borrowing for acquiring or investing in property or credit utilisation.

“When economic measures are employed, we may have to know which measure is proper for which period,” he said.

Direct assistance to farmers or rubber growers is fine, but the assistance should be made without more borrowing now, as the economy may stay like this for a while.

The global money and capital markets have been volatile for years, but the situation may ease now as global oil prices have started rising and the prices of other products will likely increase as well, Pridiyathorn said.

He expressed no concern about the Bank of Thailand’s Monetary Policy Committee or its governor, saying they were a good team. Driving the economy now does not involve much monetary policy, given the global economic slowdown.

“To drive [the economy] now, we may have to understand the situation comes from the world, which has been in contraction on the back of drops in global oil prices and declines in crop prices.

“About 80 per cent of exports for the whole world have contracted and 80 per cent of imports for the whole world have shrunk,” Pridiyathorn said.