Thailand: Public debt capped at 50% of GDP for fiscal 2021-24
The government vows to cap the ratio of public debt to GDP at 50% in the medium-term fiscal plan for 2021-24.
The Monetary and Fiscal Policy Committee, chaired by Prime Minister Prayut Chan-o-cha, on Thursday approved the medium-term fiscal policy framework as required by the Fiscal Responsibility Act.
The act, enforced from April 20, 2018, is designed to maximise budget spending and prevent politicians from repeatedly using off-budget borrowing to finance projects.
The medium-term fiscal framework will later be proposed to the cabinet for approval.
Deputy Prime Minister Somkid Jatusripitak said that in the medium term the government still has room to implement significant projects without any negative impact to the country’s monetary and fiscal framework.
The Finance Ministry reported to the cabinet on Wednesday that public debt as a portion of GDP stood at 41.24% as of September, totalling 6.9 trillion baht, up 120.84 billion baht from the same period last year.
Lavaron Sangsnit, director-general of the Fiscal Policy Office, said the rate remains far below the cap of 60% under the fiscal sustainability framework and the 50% cap in the medium-term fiscal plan.
He said the overall public should therefore not worry about the public debt, as the government’s active investment in a number of infrastructure projects will help boost the country’s economic growth.
The National Economic and Social Development Council forecasts GDP growth of 2.7-3.7% next year, up from a projected 2.6% this year, boosted by private and government investment and improved exports and tourism.
Foreign visitors are estimated to reach 41.8 million next year, generating 2.2 trillion baht, up from 39.8 million arrivals anticipated this year, generating 2.04 trillion baht.
Private investment is forecast to grow by 4.2% next year, up from 2.8% this year, with government investment expanding 6.5%, up from 2.3% this year.
Export value of goods, meanwhile, is expected to grow by 2.3% after a 2% contraction forecast this year.