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Thailand: Fetco suggests government raise public debt ceiling
The Federation of Thai Capital Market Organizations (Fetco) has suggested the government consider raising the public debt ceiling from 60% of GDP because the country requires more economic relief funds amid a worsening pandemic and the possibility of a delayed reopening.
Paiboon Nalinthrangkurn, chairman of Fetco, said Thailand’s public debt is likely to surpass the current ceiling as the pandemic worsens.
The country needs a budget to stimulate the economy and help the business sector survive the crisis.
“If the government does not have the capacity to increase the budget to stimulate the economy next year, economic growth may not meet the state target,” he said.
Despite reopening plans such as the Phuket sandbox, the target for tourists next year is still low at around 10 million, significantly lower than the nearly 40 million visitors recorded in 2019.
The government needs to increase the budget to stimulate the economy next year, said Mr Paiboon.
“The public debt ceiling needs to be lifted for an economic recovery to succeed, with a carefully laid-out budget and attention to fiscal discipline,” said Mr Paiboon.
According to the Public Debt Management Office, Thailand’s public debt stood at 8.7 trillion baht or 55.4% of GDP as of May 31, comprising 7.64 trillion baht of government debt and 761 billion of state enterprise debt.
The remainder is from other organisations related to state agencies.
The private sector, especially listed firms, are suffering from the pandemic, but around 70% of them still have more capital than debt.
The situation is much better when compared with the previous financial crisis, when most had higher levels of debt, he said.
If the Thai government succeeds in controlling the pandemic and providing a sufficient budget to stimulate growth next year, the economy will recover as planned, Mr Paiboon said.
Source: https://www.bangkokpost.com/business/2144507/fetco-suggests-government-raise-public-debt-ceiling