Thailand: Debt ceiling could be raised to 70% soon

  • The Finance Ministry may propose on 20 Sep 21 raising the ceiling of the public debt-to-GDP ratio to 70% from 60%, says a ministry source who requested anonymity. The proposal is to a committee overseeing fiscal discipline.
  • Raising the ceiling to 70% would allow Thailand to borrow an additional THB2tn, the source said.
  • The government issued the first emergency loan decree in 2020 to authorise it to borrow a total of THB1tn to fund its stimulus schemes to combat the Covid-19 pandemic. A second decree was issued in 2021 to allow the government to borrow an additional THB5bn.
  • In Sep 19, Thailand’s public debt stood at THB6.9tn, or 41% of GDP. The figure rose to THB8.91tn, or 55.6% of GDP, as of Jul 21, which was mainly attributed to the first loan decree. The figure is expected to soar to 58.8% by the end of FY21 at the end of Sep 21.
  • The source said the ratio is likely to soar past the 60% ceiling if the government borrows more and the Thai economy expands at a lower rate in 2021 or even contracts.

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