Office says fiscal space remains sound, though limited

Thailand will still have sufficient fiscal space to cope with potential crises, while the likelihood of public debt breaching the statutory ceiling of 70% of GDP remains very low this year, says the Public Debt Management Office (PDMO).

- WICHIT CHANTANUSORNSIRI

Jindarat Viriyataveekul, director-general of the PDMO, said under the public debt legal framework, the government has very limited headroom to borrow for financing accumulated budget deficits.

Under the rule that limits deficit financing to no more than 20% of total budget expenditure plus 80% of the principal repayment budget, the remaining borrowing capacity in 2026 would be only 17.1 billion baht, as the government plans to borrow 860 billion baht to finance the deficit, out of a total legal borrowing framework of 877 billion.

While the borrowing space under the public debt law appears constrained, when assessed under the State Financial and Fiscal Discipline Act, which caps public debt at no more than 70% of GDP, the overall position remains sound, noted the office.