Pension expenses for public servants are projected to rise to 800 billion baht in 22 years, posing a challenge to fiscal policy management, says Areepong Bhoocha-oom, permanent secretary of the Finance Ministry.
Under the fiscal 2013 budget, total pension expenses for the public sector are 159 billion baht, or 9% of total fiscal expenditures.
They are projected to rise to 552 billion baht or 12% of total expenditures in 2028, and nearly 800 billion in 2035.
"By 2028, the pension cost will rise to a critical level and we need to find a way to manage public spending," said Mr Areepong.
The ministry has set aside reserves for the expense by adding a percentage point to their real share in total expenditures, or 10% for fiscal 2013.
He added that projections were calculated from the current number of civil servants, at 2 million, which is quite conservative given that the number of civil servants is increasing.
"We'd rather play it safe by setting a reserve now since we expect the government's spending to be very high in the years ahead," said Mr Areepong.
He added the pension cost for retired officials and soon-to-be retirees will be a huge burden on the fiscal budget in the future if there is no appropriate measure to tame increasing expenditures.
In the 2013 fiscal budget, civil servants' salaries were the main government expenditure, at 74% of 2.4 trillion baht, while the investment budget was only 18.7% and public debt payment 7.41%.
About the author
- Writer: Wichit Chantanusornsiri
Position: Business Reporter