Debt office unfazed by loan interest payments
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Debt office unfazed by loan interest payments

The country's burden in terms of loan interest payments over the next five years will not exceed the international standard level, says Patricia Mongkhonvanit, director-general of the Public Debt Management Office (PDMO).

Mrs Patricia said the office closely monitors the ratio of the interest burden to the country's estimated annual revenue.

She said the ratio is estimated to be 8% as of the end of fiscal 2022 and remain below 10% over the next five years.

The international standard for the ratio is 10% or less.

Mrs Patricia said Thailand has to continue with an expansionary fiscal policy to support economic growth.

During 2015-21, the government invested more than 2.6 trillion baht in 178 mega-projects, covering transport, utilities and energy.

PDMO also developed the 2022-26 public debt management plan to cater to the government's planned spending of another 840 billion baht on the mega-projects during 2022-26.

She said local loans account for 98% of the office's borrowing, indicating its low exposure to foreign exchange risk.

Moreover, more than 83% of the total borrowing carries fixed interest rates.

The government raised the ceiling of the public debt-to-GDP ratio to 70% from 60% to provide more fiscal space to accommodate possible additional borrowing in the future as Thailand continues to combat the impact of the Covid-19 pandemic.

Mrs Patricia said in the future the government can review the debt ceiling once the economic situation normalises.

The public debt-to-GDP ratio stood at 60.2% as of February. It is expected to reach 62.7% at the end of fiscal 2022, below the ceiling of 70% of GDP.

The government has set aside 2.5-4% of expenditure annually to pay for the loan's principal.

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