Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

Abhisit immediately embarked on a stimulus program. The first phase, announced in January 2009, amounted to 116.7 billion baht, or 1.3 percent of GDP, with priority given to popular consumption, including “saving the nation checks” distributed by way of the Social Security Administration, bonuses for senior citizens and subsidies for public education. At the same time, the Bank of Thailand slashed interest rates to 1.25 percent—compared with the 12.5 percent they had reached during the 1998 crisis—and directed six government-owned banks to rush loans, especially to small businesses. But the January plan was only the beginning. As the severity of the crisis deepened, Abhisit upped the scale of the stimulus to a remarkable 17 percent of 2009 GDP—$40 billion—to be spent over the next four years. In 2009 the budget deficit surged from 1 percent to 5.6 percent of GDP.