Bangkok - The Thai cabinet on Tuesday approved about 270 billion baht (7.8 billion dollars) in domestic and foreign borrowing to boost liquidity in state enterprises and finance infrastructure building.

Finance Minister Korn Chatikavanij won cabinet approval for his request to raise 200 billion baht (5.8 billion dollars) in short-term loans from local banks to help Thailand's 58 state enterprises ease their liquidity problems this year.

The cabinet also approved foreign borrowing of 2 billion dollars to be sought from the World Bank, the Asian Development Bank and Japan Bank for International Cooperation to help finance infrastructure projects.

Thai Prime Minister Abhisit Vejjajiva said the foreign tranche will only be used if it necessary to stimulate the economy at the start of the fiscal year, which begins on October 1.

"This is our contingency credit line. We will not use it if it is not necessary," Abhisit told a seminar Monday.

Economists welcomed the foreign borrowing as long as it was for long-term projects, and not short-term populist policies.

"If they are matching the foreign funds with long-term investments, that's sensible," said Andrew Storz, head of research at CLSA Securities (Thailand). "If they are borrowing foreign funds for additional spending, that's risky."

The Thai government earlier this year allocated about 116 billion baht for a stimulus programme aimed at encouraging people to spend more. (dpa)