webfact Posted August 20, 2020 Share Posted August 20, 2020 Thailand edges nearer sustainable debt limit with Bt48bn ADB loan By The Nation Patricia Mongkhonvanit, director general at the PDMO Despite public debt approaching its limit of sustainability, the Finance Ministry denies the country is on the brink of bankruptcy and will take a further Bt48 billion loan from the Asian Development Bank late this month. Local media are speculating that the government is facing financial collapse following a Cabinet-approved Public Debt Management Office (PDMO) plan to borrow more Bt214 billion to finance a potentially larger budget deficit than expected. Patricia Mongkhonvanit, director general at the PDMO, said on Thursday (August 20) that government has adequate treasury reserves but admitted it needs to borrow more in case revenue falls further than estimated. The national budget passed for fiscal year 2020 totals Bt3.2 trillion. To plug the gap left by a projected shortfall in revenue, the government originally planned to borrow Bt469 billion. However, the budget bill allows the government to borrow as much as Bt680 billion to cover the deficit, meaning another Bt214 billion can be borrowed, Patricia noted. If the government borrows the full Bt680 billion, public debt will rise to 52.4 per cent of GDP, up from the current 45.83 per cent, she said. Public debt is expected to rise further to 57.8 per cent of GDP in the 2021 fiscal year (October 2020 to September 2021). The Finance Ministry has set the sustainable public debt limit at 60 per cent of GDP . “It is too early to say whether we’ll need to raise the limit beyond 60 per cent of GDP because [sustainability of] debt levels depend on changing economic conditions,” she said. By global standards, Thailand’s public debt is still relatively manageable, given debt in some countries is above 100 per cent of GDP. Economists have been urging the Thai government to spend more to boost the economy and help workers and small businesses suffering the impact of Covid-19. However, Thai public debt is under strong pressure from the sharp economic contraction and high cost of dealing with coronavirus fallout. The government also plans to borrow Bt1 trillion under the Covid-19 recovery emergency decree. Part of that total is $1.5 billion (Bt48 billion) from the Asian Development Bank, the contract for which will be signed by the Finance Ministry in late August or early September, said the PDMO chief. Source: https://www.nationthailand.com/business/30393287 -- © Copyright The Nation Thailand 2020-08-21 - Whatever you're going through, the Samaritans are here for you - Follow Thaivisa on LINE for breaking COVID-19 updates Link to comment Share on other sites More sharing options...
Popular Post pegman Posted August 20, 2020 Popular Post Share Posted August 20, 2020 One question, how does this affect the currency exchange rates? 3 1 Link to comment Share on other sites More sharing options...
Popular Post RichardColeman Posted August 20, 2020 Popular Post Share Posted August 20, 2020 (edited) 42 minutes ago, webfact said: “It is too early to say whether we’ll need to raise the limit beyond 60 per cent of GDP because [sustainability of] debt levels depend on changing economic conditions,” she said. I hate to say it but the GDP is going down, meaning that calculation will get worse even without borrowing more money. I'd be interested to know much they have knocked off of the GDP for this year in the calculation - as if 60% was based on -7.5% gdp drop (yeah, right) , it could well be 90%+ of the coming year GDP Edited August 20, 2020 by RichardColeman 1 2 Link to comment Share on other sites More sharing options...
Popular Post wobblyjohn Posted August 20, 2020 Popular Post Share Posted August 20, 2020 2 hours ago, pegman said: One question, how does this affect the currency exchange rates? The End Is Nigh The days of austerity are soon to be over and the guys who still live in Thailand can start enjoying their lives again 1 5 Link to comment Share on other sites More sharing options...
PatOngo Posted August 21, 2020 Share Posted August 21, 2020 The trough is getting low, how will the snouts survive? 1 Link to comment Share on other sites More sharing options...
colinneil Posted August 21, 2020 Share Posted August 21, 2020 4 minutes ago, PatOngo said: The trough is getting low, how will the snouts survive? Sell a few watches,???? Oops silly me the watches belong to my dead friend.???? 1 Link to comment Share on other sites More sharing options...
phetphet Posted August 21, 2020 Share Posted August 21, 2020 I thought they had shedloads of foreign currency reserves. Why not sell some of that? Link to comment Share on other sites More sharing options...
Popular Post PatOngo Posted August 21, 2020 Popular Post Share Posted August 21, 2020 4 minutes ago, colinneil said: Sell a few watches,???? Oops silly me the watches belong to my dead friend.???? Even if they did, the money would only be distributed amongst their rich friends! Nothing their for the unwashed! 3 Link to comment Share on other sites More sharing options...
smutcakes Posted August 21, 2020 Share Posted August 21, 2020 What were all the PDRC protests about the bankrupting the country when the debt to DP ration was about 40%? Great job guys. Link to comment Share on other sites More sharing options...
Popular Post hotchilli Posted August 21, 2020 Popular Post Share Posted August 21, 2020 5 hours ago, pegman said: One question, how does this affect the currency exchange rates? It won't. 3 Link to comment Share on other sites More sharing options...
Bender Rodriguez Posted August 21, 2020 Share Posted August 21, 2020 let thailand exchange / use their massage foreign exchange overflow, lower the baht, open the economy again, take the few deaths that come with it, or face bankruptcy ? people in power will lose nothing, no money nor sleep over it Link to comment Share on other sites More sharing options...
Happyman567 Posted August 21, 2020 Share Posted August 21, 2020 Plus they have to buy some outdated subs and military equipment. Funny thing when u borrow you have to pay it back When you cant then you become a Banana Republic 2 Link to comment Share on other sites More sharing options...
sammieuk1 Posted August 21, 2020 Share Posted August 21, 2020 Hurry up with that plane and order one for the watches the generals are on standby ???? Link to comment Share on other sites More sharing options...
Q Travels Posted August 21, 2020 Share Posted August 21, 2020 I guess we will all soon be facing hyper inflation. Link to comment Share on other sites More sharing options...
bkksteve123 Posted August 21, 2020 Share Posted August 21, 2020 I wonder exactly where the borrowed money is going? They cannot really afford to mess this up. It's a very challenging situation for the Thai government, and any government for that matter. Thailand needs to consider the fact that international tourism may be dead for a long time and not recover for at least a decade to 2019 levels. Even if they open the borders (which the majority of TV forum members seem to support, including myself), that doesn't necessarily mean tourism will bounce back. Yes, there are probably 100,000+ people waiting to fly back in and sure, that helps, but it's a drop in the bucket in the larger scheme of things. Do you attempt to help the struggling tourism-related businesses in the hope that international arrivals will recover in time for them to be self sustainable again before the entire country is bankrupt? That could end up being a waste of resources if tourism doesn't recover and the end result is bankruptcy for 80% of them. Or do you start thinking outside the box, investing in developing new sectors i.e. shifting the soon-to-be unemployed work force to new sectors? I would hate to be in charge of these decisions. But the isolation and zero-case strategy that Thailand is pursuing at the moment is extremely risky and essentially betting on a miracle cure that is unlikely to happen. Link to comment Share on other sites More sharing options...
ronaldo0 Posted August 21, 2020 Share Posted August 21, 2020 No it’s not on the brink of bankruptcy but hey can we have Bt48 billion please ! ???? Link to comment Share on other sites More sharing options...
roquefort Posted August 21, 2020 Share Posted August 21, 2020 If Thailand is on the brink of bankruptcy at 60% debt to GDP, most Western countries are already bankrupt (USA 120% etc etc). Link to comment Share on other sites More sharing options...
Cake Monster Posted August 21, 2020 Share Posted August 21, 2020 It was only a few weeks ago that Thailand received a "gift " from the United States of $ 5 Billion ( If I remember correctly ) to aid the fight against Covid. Now they want to borrow another $1.5 Billion from the ADB. The money seems to be flowing out of the Bathtub like water at the moment, and the Plug needs to be found very quickly. Link to comment Share on other sites More sharing options...
herfiehandbag Posted August 21, 2020 Share Posted August 21, 2020 9 hours ago, phetphet said: I thought they had shedloads of foreign currency reserves. Why not sell some of that? I rather think that they are "spoken for" as it were! Link to comment Share on other sites More sharing options...
DaveCW Posted August 21, 2020 Share Posted August 21, 2020 1 hour ago, Cake Monster said: It was only a few weeks ago that Thailand received a "gift " from the United States of $ 5 Billion ( If I remember correctly ) to aid the fight against Covid. Now they want to borrow another $1.5 Billion from the ADB. The money seems to be flowing out of the Bathtub like water at the moment, and the Plug needs to be found very quickly. I Hope they cleaned that dirty Farang money. 1 Link to comment Share on other sites More sharing options...
timendres Posted August 21, 2020 Share Posted August 21, 2020 19 hours ago, webfact said: By global standards, Thailand’s public debt is still relatively manageable, given debt in some countries is above 100 per cent of GDP. Not all debt is the same. So this is a ridiculous comparison. Link to comment Share on other sites More sharing options...
Grumpy one Posted August 21, 2020 Share Posted August 21, 2020 16 hours ago, phetphet said: I thought they had shedloads of foreign currency reserves. Why not sell some of that? That's already left the country. Between the Shin's and a numerous other politicians the cash is safely stored where it will give them a comfy future Link to comment Share on other sites More sharing options...
DrTuner Posted August 21, 2020 Share Posted August 21, 2020 Uh-huh. Link to comment Share on other sites More sharing options...
Fex Bluse Posted August 21, 2020 Share Posted August 21, 2020 The usual expats will be here soon to tell us all that Thailand has the world's strongest economy and massive reserves and is still rich. Link to comment Share on other sites More sharing options...
Fex Bluse Posted August 21, 2020 Share Posted August 21, 2020 23 hours ago, webfact said: Patricia Mongkhonvanit, director general at the PDMO Noy too bad, that Patricia. Link to comment Share on other sites More sharing options...
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