The Finance Ministry's Public Debt Management Office (PDMO) estimates that the government will start borrowing the first lot under the seven-year, 2 trillion baht scheme to fund infrastructure development projects next fiscal year, which starts Oct 1 this year.
Chularat: Should not affect Thai liquidity
After being endorsed in principle in March, the bill authorising the borrowing is being deliberated by a parliamentary panel and government agencies related to the infrastructure projects are mapping out plans, said director-general Chularat Suteethorn.
The borrowing plan to fund infrastructure projects and the 350-billion-baht water management would not affect the liquidity of the country's financial system, she said, adding that the low interest rate also supports the massive investment.
The hefty borrowing to finance the infrastructure development, the bulk of which is in rail projects, has raised concerns that the public debt will exceed the threshold 60% of gross domestic product (GDP) and could reduce excessive liquidity in the Thai financial system.
According to PDMO data, Thailand's public debt fell marginally to 44.05% of GDP in February, compared with 44.08% the previous month.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong recently said the government hoped the bill would increase public investment by 300-400 billion baht annually over seven years and push the compound GDP over the period to 120 trillion baht. Annual GDP stood at 11 trillion baht in 2012.
Ms Chularat said the PDMO for this fiscal year has to raise funds through a series of bond issues with a combined 1.04 trillion baht to finance the 300-billion-baht budget deficit, the 350-billion-baht water management project, refinance existing debt and offer benchmark bonds.
The PDMO is offering three-year savings bonds to the public worth up to 4 billion baht with a coupon rate of 3.5% through four commercial banks _ Bangkok Bank (BBL), Krungthai Bank (KTB), Kasikornbank (KBANK) and Siam Commercial Bank (SCB). The subscription period runs until Sept 13.
The PDMO has already issued the first batch of the 4 billion baht savings bonds for this fiscal year.