State preps B300bn for new measures
The government looks set to prepare more than 300 billion baht's worth of new measures to help reduce people's expenses and stimulate domestic consumption battered by a fresh wave of Covid-19 infections.
Kulaya Tantitemit, the director-general of the Fiscal Policy Office under the Finance Ministry, said the ministry has been keeping a very close eye on the spread of Covid-19 in the country and other related factors that may affect the country's economy overall and is ready to roll out measures to remedy the impact.
"For measures in the subsequent steps, the Finance Ministry is considering their propriety and compliance with the economic situation in each period in order to maximise benefits to the people," she said.
"At the same time, the government has reserved more than 300 billion baht for spending plans for economic and social rehabilitation."
According to a Finance Ministry source who requested anonymity, the government now has about 380 billion baht available to be allocated to remedy the impact of the pandemic, 240 billion baht of which is left over from the 1-trillion-baht loan decree while the remainder will come from the government's fiscal expenditure budget.
In the event that the infections are prolonged, the source said additional borrowings in addition to the 1-trillion-baht loan decree are inevitable and the government itself is believed to be considering raising the ceiling of its fiscal sustainability framework, which caps public debt at 60% of GDP.
The source estimated at the end of fiscal 2021 or Sept 30 this year, Thailand's public debt-to-GDP ratio would stand at 58.75%.
Thailand has managed to keep public debt to GDP below the sustainability framework ceiling for decades by providing fiscal policy space for the government to buffer against economic shocks.
The public debt level was around 40% of GDP before the pandemic emerged in early 2020.
A review of the government's fiscal sustainability framework is conducted every three years and a review is due to take place this year.
The IMF's latest fiscal monitor says global public debt stood at 97.3% of GDP in 2020, a rise of 13% from the period before the pandemic, while the figures are expected to reach 98.9% in 2021 and 99% in 2022.