Public debt not scary yet, PDMO says
Ratio to GDP stood at 41% in 2019
Thailand's increased public debt, attributed to borrowing to sustain economic conditions during the pandemic, remains below the average rate seen in emerging markets, says the Public Debt Management Office.
PDMO director-general Patricia Mongkhonvanit said the IMF reported that global public debt has risen by 20% on average during the pandemic, due to greater borrowing to withstand the economic impact.
Thailand's ratio of public debt to GDP is expected to rise to 57% in 2021 from 41% in 2019, Mrs Patricia said.
The average public debt of emerging-market countries stands at 48%, she said.
Examining whether Thailand's public debt is at risk in terms of interest burden on the government budget is important, Mrs Patricia said.
Interest burden on the government budget is 5% for Thailand, while the international standard is capped at no more than 10%.
"The interest burden on our budget is still very low because we have managed it well," Mrs Patricia said. "Countries that are worrisome are those with high public debt to GDP, as well as high interest burden for the government budget.
"There are some countries where the public debt ratio to GDP is as high as 75%, while the interest burden on the government budget is at 25-30%."
Thailand's interest burden to the government budget will rise to 6% next year, which is still below the international standard, she said.
The average interest burden under the PDMO's portfolio is 2.95%.
The 1-trillion-baht loan decree to shore up Thailand's economic growth momentum is sufficient if the country manages the outbreak situation and economic conditions at this rate, but this depends on future circumstances, Mrs Patricia said.
Of the 1-trillion-baht sum, debt worth 303 billion baht has been issued so far.
Mrs Patricia said the government's public debt consists mainly of debts that the government needs to repay from its own budget, or debts shouldered or guaranteed directly by the Finance Ministry. The total amount is 5 trillion baht or 35% of GDP.
Other debt consists of debts incurred by the Financial Institutions Development Fund and debts shouldered by specialised financial institutions whereby government agencies can repay the principal and interest amount themselves.
Since Thai Airways International's status as a state-owned enterprise under the cabinet resolution has been revoked, the company's debt worth 145 billion baht as of April is no longer classified as public debt, which will make the public debt ratio fall by around 0.9%, Mrs Patricia said.