Government to hike repayment in bid to rein in public debt

[webfact]

Government to hike repayment in bid to rein in public debt

By The Nation

 

Patricia Mongkhonvanit, director-general at the Public Debt Management Office (PDMO)

 

The government has increased debt repayment to 3 per cent of the total national annual budget in order to maintain fiscal discipline, the Finance Ministry said.

 

Patricia Mongkhonvanit, director-general at the Public Debt Management Office (PDMO), said the government has increased debt repayment to 3 per cent of the annual budget of Bt 3.3 trillion for fiscal year 2021 (October 2020 to September 2021).

 

Usually, the government earmarks about 2 per cent of total expenditure for debt payment, she noted.

 

In the current fiscal year, the government had originally planned principal repayment at 2.68 per cent of total expenditure of Bt3.2 trillion, but following the impact of Covid-19 on the economy, the government cut debt payment to 1.68 per cent, she explained.

 

According to the fiscal discipline law, debt payment will be between 2.5 to 3.5 per cent.

 

Meanwhile, interest payment is set at 5-6 per cent of total expenditure, in keeping with the international benchmark of less than 10 per cent.

 

She assured that Thai public debt was not high, currently at 45.83 per cent of gross domestic product (GDP). However, public debt will shoot up to 57.8 per cent of GDP by the end of fiscal year 2021, approaching the sustainability limit set at 60 per cent of GDP.

 

Thai public debt is on a rising trend as the government recently issued an emergency decree to borrow Bt1 trillion to deal with Covid-19's impact on the economy and people's  income. The government also plans to borrow an extra Bt214 billion to finance the budget deficit, originally estimated to be Bt 469 billion.

 

Of the Bt1-trillion loan for recovery from the impact of Covid-19, so far the government has borrowed about 33 per cent of the target. The government’s borrowing is expected to reach Bt450 billion by the end of September -- the end of the current fiscal year. The rest of the Bt550 billion will be borrowed during fiscal year 2021, she added.

 

The budget bill for fiscal year 2021 is pending approval in Parliament.

 

Source: https://www.nationthailand.com/business/30393753

 

-- © Copyright The Nation Thailand 2020-08-31

 

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[Pilotman]

If the Thais think this is bad, they need to see what the muppets in the UK are having to deal with. 

[bangkokfrog]

2 hours ago, webfact said:

The government has increased debt repayment to 3 per cent of the total national annual budget in order to maintain fiscal discipline, the Finance Ministry said.

One wonders if this is really "to maintain discipline" Would it not also have the effect of keeping the baht high so that those in the know can salt as much as possible overseas before the coming meltdown? Why not spend the extra 1% helping the people!

[sammieuk1]

After trillions must come sillyions here ????

[RichardColeman]

4 hours ago, webfact said:

She assured that Thai public debt was not high, currently at 45.83 per cent of gross domestic product (GDP). However, public debt will shoot up to 57.8 per cent of GDP by the end of fiscal year 2021, approaching the sustainability limit set at 60 per cent of GDP.

I'd like to know just when that forecast predicts that tourism will be back in full flow - if it is based on back in full flow in 3 months, that 60, will be more like 80%

[hotchilli]

7 hours ago, webfact said:

Government to hike repayment in bid to rein in public debt

I don't know any Thais who are not up to their necks in debt, every person I speak to talk of money issues and how to pay for everything they owe.