Thailand's public debt will not exceed half of GDP if economic growth comes in at 3.6% this year, says a senior Finance Ministry official.
GDP is the main factor in deciding the public debt ratio this year, as borrowing plans have been fixed, said Theeraj Athanavanich, deputy director-general of the ministry's Public Debt Management Office (PDMO).
The ratio will be 48.9% at the end of fiscal 2015 if growth reaches 3.6% and inflation stands at 0.8%, he said.
Mr Theeraj said the public-debt-to-GDP ratio increased by almost one percentage point for every 100-billion-baht decline in GDP value.
The estimated ratio is now below the 50% threshold even after public spending for infrastructure investment is included.
In accordance with its fiscal sustainability framework, the Finance Ministry has promised to cap the public-debt-to-GDP ratio at 60% but set its owned threshold at 50% as an alarm aimed at alerting policymakers over spending.
Concerns that the ratio will surpass the 60% level are escalating, given the government's hefty infrastructure investment plan through 2022.
The country's public debt amounted to 5.72 trillion baht or 46.8% of GDP at the end of February, an increase of 62.3 billion from January.
Mr Theeraj said at least two international credit rating agencies that recently evaluated Thailand's fiscal position had not expressed any worries about Thailand's public debt, as the debt run-up was aimed at developing the nation's long-term competitiveness.
The government has approved 2 trillion baht to develop transport infrastructure — 52.73% for railways, 36.45% for road expansion, 6.86% for air transport and 3.96% for water transport.
The National Legislative Assembly is deliberating a bill that would require future governments to disclose estimated project costs as a fiscal safeguard in introducing populist policies.
In another development, Mr Theeraj said a 78.2-billion-baht borrowing plan for fast-track water resource management and road development would start being disbursed soon — 32.9 billion in fiscal 2015, 39.7 billion in fiscal 2016 and 5.6 billion in fiscal 2017.
Of the total, 37.6 billion baht is earmarked for water management and the rest for road repair.
The plan is viewed as a government economic stimulus, as it is expected to pump money into the economic system while domestic consumption, exports and private investment remain tepid.
Mr Theeraj expects contracts for 5,000 water management and road repair projects will be signed by June and the PDMO will start borrowing 10 billion baht from financial institutions to fund them during this quarter.