Thailand's public debt will not exceed the 60% ceiling rate by 2025 if there is no more borrowing for Covid-19 management, says Finance Minister Arkhom Termpittayapaisith.
The government expects to manage the fresh outbreak and there is sufficient capital in government coffers to cushion the impact, said Mr Arkhom. But if a third wave occurs, the government might have to resort to more loans, he said.
An initial assessment of this scenario found it would not affect fiscal stability because of robust fundamentals, said Mr Arkhom.
Based on an assessment of the four-year fiscal situation, running from 2022 to 2025, Thailand's public debt-to-GDP ratio will not exceed 60%, with the 1-trillion-baht emergency loan decree taken into account, he said.
Mr Arkhom reiterated fiscal stability will not be affected even if public debt rises above the 60% ceiling rate in case of more borrowing to remedy deteriorating economic conditions.
Thailand's public debt-to-GDP ratio stood at 52.1% with a value of 8.1 trillion baht as of Dec 31, according to the Public Debt Management Office.
The public debt level would rise to 57% of GDP upon borrowing the full amount under the 1-trillion-baht emergency loan decree.
Many advanced economies, emerging economies and low-income countries have adopted an aggressive fiscal stimulus policy to resuscitate economic conditions dampened by the pandemic.
With the use of aggressive fiscal stimulus, the public debt-to-GDP ratio of some advanced economies will likely overshoot 100%, said Mr Arkhom. US president Joe Biden announced a US$1.9 trillion coronavirus relief package to tackle the economic fallout from the pandemic. US public debt stood at 127% of GDP as of last year's third quarter, according to Federal Reserve Bank of St. Louis data.