Thailand's public debt ceiling will likely increase by 17.8% to 1.72 trillion baht in the next fiscal year, the highest in six years, to support new investments and expansion projects by state enterprises.
The Public Debt Management Office will seek cabinet approval this month for the ceiling expansion, said deputy director Teerat Attavanich on Thursday.
Of the total public debt the government can create in fiscal 2016, 638 billion baht, or 37%, will be new obligations, he said.
The new debts will comprise borrowings to cover budget deficit (390 billion baht or 60%).
Another 125 billion baht or 20% of all new debts will finance new investments. Of this portion, 63 billion baht will be re-lent to state enterprises for the dual-track rail and the Red Line mass transit projects. The rest will go to building two motorways under the supervision of the Highways Department and investments by the State Railway of Thailand (SRT) under the government's economic stimulus programme.
The remaining 123 billion baht or 20% of the new debts will go to state enterprises such as Thai Airways International Plc, PTT Plc and other state-owned listed companies.
"The new debts are higher than 370 billion baht allocated in fiscal 2015 since the budget deficit was 140 billion higher," Mr Teerat said.
For the current fiscal 2015 ending in September, the office is revising the new debts for the third time. The amount will be trimmed by 125 billion because of the lack of readiness by the SRT and the Mass Rapid Transit Authority of Thailand to implement projects by schedule.
"Some government agencies also use their own revenue to invest. Besides, the water-management project uses the proceeds from a telecommunication fund.
"These have brought down the public debt ceiling for this fiscal year to 1.46 trillion baht," he said.
As of the end of June, the public debt stood at 42.36% of gross domestic product (GDP), or 5.7 trillion baht.
"We expect the public debt to GDP ratio to be within the 60% sustainable framework set by the Finance Ministry. It will peak at 53% in 2020, still within the framework."
Public debt peaked at 61.7% of GDP against the 65% ceiling in 2000 following the economic crisis.