Govt debt ratio hike 'won't hurt monetary, fiscal discipline'
published : 31 May 2019 at 04:59
writer: Wichit Chantanusornsiri
The government's move to raise its off-budget debt commitment as a proportion of the national budget from 5% to 8% will not have any effect on monetary or fiscal discipline, according to an adviser to the Public Debt Management Office.
Theeraj Athanavanich, the office's bond market adviser, said the ceiling hike would not have any impact on the government's budget allocation plans in the future, citing a study by the Fiscal Policy Office.
The adviser was commenting in response to the Monetary and Fiscal Policy Committee's notification about the ceiling increase -- which was published in the Royal Gazette on Monday, but retroactively took effect from May 22.
He added that the debt-to-budget ratio is meant to facilitate the construction of megaprojects.
Mr Theeraj explaioned that the increase is aimed at accommodating infrastructure megaprojects being pushed by the government, such as the high-speed train scheme to link three major airports -- namely Bangkok's Don Mueang, Samut Prakan's Suvarnabhumi and Rayong's U-Tapao.
"The government will have to provide 140 billion baht in capital support for the contractor, which will be paid out in 10 annual installments," he said.
That said, the government will have to continuously review whether the current ceiling is suitable for economic conditions at the time, he said, before adding that such a review may be needed in three years.
The ceiling is designed to prevent the administration from engaging in excessive debt commitments, which would impact budget allocations in the future, according to Mr Theeraj.
"We don't want the government to use the budget without the proper checks-and-balances," he said.