The Public Debt Management Office (PDMO) is unlikely to borrow the entire 805 billion baht it is permitted to utilise to offset the budget deficit, as there are sufficient treasury reserves, according to the office's chief.
PDMO director-general Patchara Anuntasilpa said under the framework for borrowing to cover the budget deficit, as stipulated in the Public Debt Management Act, the government is allowed to borrow up to 20% of the annual budget expenditure plus 80% of the budget for debt principal repayment.
For fiscal 2024, borrowing under the legal framework can amount to 815 billion baht, while the government plans to borrow 805 billion to offset the deficit.
PDMO expects actual borrowing to cover the deficit will not reach the planned amount, estimated to be around 80 billion baht less as the government has sufficient treasury reserves. The office anticipates by the end of fiscal 2024, the government will have 600 billion baht in treasury reserves.
Mr Patchara said PDMO is preparing a debt management plan for 2025 to 2029 to assess future borrowing plans and how much the government's debt burden will expand.
According to the Medium-Term Fiscal Framework for 2024 to 2029, public debt as a percentage of GDP is expected to be 65.7% in fiscal 2024, peaking at 68.9% in 2027, and totalling 68.1% in 2029.
He said the current level of public debt remains below the fiscal sustainability threshold, which was set at 70% of GDP. As of June this year, public debt stood at 63.5% of GDP.
However, if the internationally recognised definition of public debt used by the International Monetary Fund (IMF) is applied, Thailand's public debt would be only 58.4% of GDP, as the IMF version does not include the debt of state enterprises that are not guaranteed by the government, nor the debt of the Bank of Thailand.
Mr Patchara also discussed the government's rating assessment by rating agencies, noting that from an economic perspective this year is unique with three budgets being prepared within the same year: the 2024 expenditure budget of 3.6 trillion baht, the additional 2024 expenditure budget of 122 billion baht, and the 2025 expenditure budget of 3.75 trillion baht.
These budget funds are slated for disbursement in the fourth quarter this year and the first quarter of next year, which is expected to drive economic growth, deemed unlikely to fall below 3%, he said.
However, rating agencies also consider other issues, particularly political risk.
Currently, S&P rates the government's bonds at BBB+, Moody's at Baa1, and Fitch at BBB+, all with a stable outlook.