The House of Representatives May 31-Cabinet Acknowledges Public Debt to GDP at 61.30 Percent, Thai Stable Credibility strong fiscal

Mr. Anucha Burapachaisri Deputy Secretary-General to the Prime Minister for Political Affairs Acting as a spokesperson for the Prime Minister’s Office, said that the cabinet meeting acknowledged that the public debt to gross domestic product (GDP) ratio had a ceiling frame of no more than 70 percent, while the actual public debt ratio was 61.30 percent, valued at 10.797 trillion baht. gross domestic product (GDP) of 17.615 trillion baht

The ratio of government debt burden to fiscal year projected revenue Not more than 35 percent, the proportion of actual debt 30.91 percent, government debt burden of 805,677 million baht, estimated income of 2.606 trillion baht, with foreign currency public debt to total public debt. The framework set by the Board of Directors is not more than 10 percent. The proportion of actual debt is 1.63 percent.

The Ministry of Finance added that, under normal circumstances, the government borrowed money to offset the budget deficit for investment purposes. More than 75 percent of the loans are for critical infrastructure projects in the country, such as transportation, energy, utilities, infrastructure, education and housing. The public debt at the end of fiscal year 2019 before the outbreak of COVID-19 was at 41.06 percent of GDP and when Thailand had to face the outbreak of COVID-19 that severely affected economic growth and people across the country, the government Therefore, it is necessary to borrow more than 1.5 trillion baht to help people and all sectors, as well as urgently restore the economy and society. which is in line with the actions of governments around the world As a result, public debt to GDP at the end of March 2023 stood at 61.30 percent.

In the past, the government was able to manage public debt effectively. with reasonable cost and acceptable risk. In addition, more than 98 percent of the debt is in Thai baht, thus reducing the risk of exchange rates. (Pre-funding) when the interest rate is appropriate Including debt restructuring to reduce debt concentration, extend debt life and reduce interest rate risk. If the interest rate has a downward direction Debt restructuring has been made to reduce the average cost of public debt. Including in accordance with the ability to pay debts which in the past was a period of rising interest rates The Ministry of Finance has converted floating interest debt to fixed interest. Makes more than 85 percent of the debt is a fixed interest debt. This reduces the risk of interest rate volatility.

In addition, the government has given importance to debt repayment by increasing the budget for both principal and interest repayment. It has also accelerated economic growth through investment in infrastructure projects. And when the government has more income, it can be used to pay more debt.

While international credit rating agencies maintain Thailand’s credit rating at BBB+ and Stable Outlook, believing that Thailand’s public finance sector remains strong. at a manageable level And the government still has fiscal space that can accommodate unexpected situations in the future. While the analysis of Fitch Ratings (Fitch Ratings) looks at the situation of political and fiscal uncertainty after the election. May be a drag on Thailand’s credit rating in the short term.

Because the establishment of a coalition government will affect the efficiency of the country’s policy. Delays in budget preparation for fiscal year 2024; large increases in costs from policy measures implemented during the campaign; and its ability to maintain a stable government debt ratio. However, Thailand’s credit rating continues to be supported by its strong foreign financial position. An effective macroeconomic policy framework The recovery of private consumption and the return of foreign tourists are important.-Thai News Agency

Source: Thai News Agency