The country could save expenditures for stimulus programmes to fund social welfare and enact policies to reduce inequality and raise the skill level of the population, says the World Bank.
The bank expects Thai public debt to reach 50% of gross domestic product (GDP) by the end of 2013, up from 45% at the end of this year.
The rapid increase in public debt from hidden liabilities and continued consumption spending could eat away funds for social investment, although so far it remains under control.
Matthew Verghis, the World Bank's lead economist for Southeast Asia, said the debt of state-owned enterprises has already been counted in the estimated public debt, and almost all of it is baht-denominated and long-term in maturity, so the public debt will remain sustainable.
But hidden liabilities from specialised financial structures, notably paddy pledging, could be significant.
"While Thailand's public debt is currently sustainable, a huge increase in the public debt by 8-9% of GDP per year could make it unsustainable in the long term," said Mr Verghis.
"The government might redirect some of the funds spent on stimulus programmes to social programmes that address long-term needs such as old-age pensions and those that reduce inequality and increase people's skills."
The World Bank forecasts spending on the various stimulus schemes to decrease to 2.4% of GDP next year and 2% thereafter from 5.4% this year due to the expiry of some programmes such as the first-time car buyer tax rebate.
The World Bank's estimate of public debt includes the government's borrowing to finance various projects such as 80 billion baht in forgone revenue for the first-time car- and homebuyer schemes, 40 billion in expenses for hiking public employee salaries, 120 billion in corporate income tax cuts, 9 billion in excise tax cuts on diesel per month and 330 billion in borrowing for water management projects.
Supposing the government can sell all stockpiled rice at market prices, the World Bank expects losses to total 115 billion baht for the 2011-12 harvest season and 132 billion for the 2012-13 season.
The government has not confirmed any sale of stocked rice last year. The World Bank expects the global rice price to decline from US$550 a tonne this year to $520 next year _ still $200 below the pledging price.
Annette Dixon, the bank's country director for Southeast Asia, said the Thai government should spend more to achieve equality in education performance between Bangkok and rural students.
Schools should have more autonomy from the government and operate with better accountability for their performance, she said.
"Spending on education should focus on competency of students in accessing knowledge," said Ms Dixon.
The World Bank found Bangkok receives nearly three-quarters of the budget for 17% of the population compared with 6% of the spending in the Northeast for 34% of the population.