The Public Debt Management Office (PDMO) says the issuance of government bonds in fiscal 2024 will be at an appropriate level, according to director-general Patricia Mongkhonvanit.
She said the bond issuance limit for fiscal 2024 increased from fiscal 2023 by around 160 billion baht to offset the budget deficit in fiscal 2024 and support growth of the domestic bond market.
"The issuance of government bonds has not been excessive, which would lead to oversupply in the market. We believe issuance is at an appropriate level and we are confident the market can support it," said Mrs Patricia.
Regarding the high yield of 10-year government bonds, she said it was caused by many factors, including policy rate hikes abroad, an increase in interest rates in the domestic money market, and more alternative investment options for investors.
The return on 10-year government bonds in 2022 was higher than the current level, said Mrs Patricia.
She said the higher yields are in line with the trend of rising interest rates globally, and they will increase the government's fiscal burden for interest payments.
However, PDMO is expected to restructure short-term debt to long-term debt with fixed interest rates to reduce the government's fiscal burden.
The fiscal sector remains in a strong position with ample foreign reserves, said Mrs Patricia.
In July, Fitch Ratings affirmed Thailand's sovereign credit rating at BBB+ with a stable outlook, citing GDP growth and the recovery of the tourism sector as the key factors.
This rating reflects investor confidence in government bonds.
Previously, investors expressed concern about the increase in the bond issuance limit for fiscal 2024 to 1.25 trillion baht, up from 1.08 trillion in fiscal 2023.
The return on 10-year government bonds, considered a benchmark, reached a peak of 3.19% yesterday.
The government increased the fiscal 2024 budget to 3.48 trillion baht, up from the 3.35 trillion set by the Prayut Chan-o-cha administration, an increase of 130 billion baht.
The budget deficit now totals 693 billion baht, up by 100 billion baht.