Current Public Debt to GDP Ratio Still Below Ceiling

[webfact]

by Na-ark Rojanasuvan

    

BANGKOK (NNT) - Thailand’s public debt-to-GDP ratio stood at 60.17% as of February, with the figure expected to reach 62.7% by the end of fiscal 2022 - below the current ceiling of 70% of GDP. February GDP was 16.3 trillion baht.

 

Deputy Finance Minister Santi Promphat reiterated that the government has optimally managed the nation’s financial situation, with various measures implemented to assist people and especially vulnerable groups. He also said more policies will be revealed in due time.

 

The deputy minister stressed that the government is not facing bankruptcy, but acknowledged there have been challenges due to the current COVID-19 situation pandemic and other global factors.

 

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Patricia Mongkhonvanit, director-general of the Public Debt Management Office (PDMO), meanwhile said the ratio of interest burden to the nation’s estimated annual revenue is projected to be 8% by the end of fiscal 2022. The figure is expected to remain below 10% - the international standard for the ratio - over the next five years.

 

Patricia said Thailand must continue with an expansionary fiscal policy to support economic growth. She added that from 2015-2021, the government invested more than 2.6 trillion baht in 178 mega-projects covering transport, utilities and energy.

 

The director-general noted that the PDMO developed the 2022-2026 public debt management plan to cater to the government’s expected spending of another 840 billion baht on mega-projects for that period.

 

 

-- © Copyright NNT 2022-04-20

 

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[Pib]

Sure you are below the debt ceiling which was raised from 60% to 70% in late 2021.   Easy to stay below the debt ceiling by moving the goal posts as needed.

 

 

https://www.thailand-business-news.com/banking/85106-thailand-raises-public-debt-ceiling-from-60-to-70-of-gdp

Quote

 

Thailand’s State Monetary and Fiscal Policy Committee has decided to raise the ceiling of the public debt-to-GDP ratio from 60% to 70%, which will allow further public sector borrowing to rehabilitate the economy battered by COVID-19.

Finance Minister Arkhom Termpittayapaisith said the decision is intended to provide the government with more fiscal manoeuvrability should the need arise for the government to borrow more money to carry out medium-term financial policies.

 

 

[Excel]

Assuming that there is a modicum of truth in the figures perhaps.

[KanchanaburiGuy]

Comparing debt GDP is often used to measure. standing, but it's a fool's comparison. It's a magic trick. It's prestidigitation!

 

You see, the government.......... the holder of the debt.......... doesn't OWN the GDP........... so it can't use the GDP to pay the debt, anyway! 

 

It'd be like this............ 

 

Say you live in a Condo and there are 50 units in your building. You run up personal debts that would be difficult or impossible to pay, based on your personal income. 

 

But you say: "Hey, I'm not in trouble! Cuz, you see, MY debt is only a small fraction of the income of ALL the people who live in these Condos!" 

 

Preposterous, huh? 

 

It's preposterous because the income from all those other Condo owners......... doesn't belong to you! So comparing YOUR debt to THEIR income is just plain silly!

 

But that's what the government does when they compare THEIR debt............ to GDP.----GDP they don't own! 

 

Yes, GDP gives them some indication of potential tax revenues. And if you're going to confiscate money from someone........... it's always nice to know how much they have to begin with! But there are many factors that go into determining whether those who PRODUCE the GDP........... can actually afford to pay what the government demands! 

 

. 

 

Compariing debt to GDP is a fool's game; a magic trick; a scam. It's a way for governments to LOOK LlKE they are being responsible with their borrowing and debt......... when it doesn't really say that, at all! 

 

My suggestion? Don't let yourself get suckered by this! ????????????

 

Cheers! 

Edited April 20, 2022 by KanchanaburiGuy

[rott]

Now I know what prestidigitation means. Always wondered, thanks KG. 

[StayinThailand2much]

1 hour ago, Excel said:

Assuming that there is a modicum of truth in the figures perhaps.

Well, a government that has income, but doesn't spend much for infrastructure, pensions, the unemployed, etc., can easily keep the public debt-to-GDP ratio low. - I guess the Thailand government is more like a Swiss bank; letting the lowly peasants and workers fend for themselves, while hoarding gold and foreign currencies.

 

 

Edited April 20, 2022 by StayinThailand2much

[Eric Loh]

12 minutes ago, StayinThailand2much said:

Well, a government that has income, but doesn't spend much for infrastructure, pensions, the unemployed, etc., can easily keep the public debt-to-GDP ratio low. - I guess the Thailand government is more like a Swiss bank; letting the lowly peasants and workers fend for themselves, while hoarding gold and foreign currencies.

 

 

Well they did spend 4.7% more than revenue in 2020 and caused the debt to GDP ratio to rise to current 60%. Must have spent on something besides the military. 

[StayinThailand2much]

16 minutes ago, Eric Loh said:

Well they did spend 4.7% more than revenue in 2020 and caused the debt to GDP ratio to rise to current 60%. Must have spent on something besides the military. 

Didn't they buy some submarines, because they were 'essential'?

 

And while they do spend, it is certainly not enough. Thailand has been repeatedly advised to bring its infrastructure up to par. (Not to mention the educational system!) And what they spent over the past two years in face of the pandemic, is, IMHO, laughable, as they didn't even manage to adequately vaccinate vulnerable people. (See recent news reports.)

Edited April 20, 2022 by StayinThailand2much

[Card]

1 hour ago, KanchanaburiGuy said:

Comparing debt GDP is often used to measure. standing, but it's a fool's comparison. It's a magic trick. It's prestidigitation!

 

You see, the government.......... the holder of the debt.......... doesn't OWN the GDP........... so it can't use the GDP to pay the debt, anyway! 

 

It'd be like this............ 

 

Say you live in a Condo and there are 50 units in your building. You run up personal debts that would be difficult or impossible to pay, based on your personal income. 

 

But you say: "Hey, I'm not in trouble! Cuz, you see, MY debt is only a small fraction of the income of ALL the people who live in these Condos!" 

 

Preposterous, huh? 

 

It's preposterous because the income from all those other Condo owners......... doesn't belong to you! So comparing YOUR debt to THEIR income is just plain silly!

 

But that's what the government does when they compare THEIR debt............ to GDP.----GDP they don't own! 

 

Yes, GDP gives them some indication of potential tax revenues. And if you're going to confiscate money from someone........... it's always nice to know how much they have to begin with! But there are many factors that go into determining whether those who PRODUCE the GDP........... can actually afford to pay what the government demands! 

 

. 

 

Compariing debt to GDP is a fool's game; a magic trick; a scam. It's a way for governments to LOOK LlKE they are being responsible with their borrowing and debt......... when it doesn't really say that, at all! 

 

My suggestion? Don't let yourself get suckered by this! ????????????

 

Cheers! 

The govt does  not own the GDP but they benefit from it through taxes as you suggest and more importantly they can control it via economic policy.

[hotchilli]

Depends on what floor your standing on as to the height of the ceiling now?

[Sydebolle]

And if the <deleted> h1ts the fan .... do like other countries and just lift the ceiling to 75%, 80% or even higher. And, as we all know Thailand, they might go even over 100%. So, what's the problem? 

[placeholder]

7 hours ago, KanchanaburiGuy said:

Comparing debt GDP is often used to measure. standing, but it's a fool's comparison. It's a magic trick. It's prestidigitation!

 

You see, the government.......... the holder of the debt.......... doesn't OWN the GDP........... so it can't use the GDP to pay the debt, anyway! 

 

It'd be like this............ 

 

Say you live in a Condo and there are 50 units in your building. You run up personal debts that would be difficult or impossible to pay, based on your personal income. 

 

But you say: "Hey, I'm not in trouble! Cuz, you see, MY debt is only a small fraction of the income of ALL the people who live in these Condos!" 

 

Preposterous, huh? 

 

It's preposterous because the income from all those other Condo owners......... doesn't belong to you! So comparing YOUR debt to THEIR income is just plain silly!

 

But that's what the government does when they compare THEIR debt............ to GDP.----GDP they don't own! 

 

Yes, GDP gives them some indication of potential tax revenues. And if you're going to confiscate money from someone........... it's always nice to know how much they have to begin with! But there are many factors that go into determining whether those who PRODUCE the GDP........... can actually afford to pay what the government demands! 

 

. 

 

Compariing debt to GDP is a fool's game; a magic trick; a scam. It's a way for governments to LOOK LlKE they are being responsible with their borrowing and debt......... when it doesn't really say that, at all! 

 

My suggestion? Don't let yourself get suckered by this! ????????????

 

Cheers! 

Your comparison of the government's position to that of a condo owner makes no sense at all. The government isn't just one of many equal tenants. If there's any validity in any real estate analogy then the government is more like the owner of a building of commercial rental units. And the rates are tied to the tenants income. As the tenants grow richer the government can borrow more money against projected income. Some of that borrowed money goes to improve building infrastructure and services which allows the tenants to earn even more money. Of course a government can borrow wastefully for projects that don't repay investments.

 

And, as the following excerpt shows, there's a fair dose of obfuscation in your comment as well.

 

"But there are many factors that go into determining whether those who PRODUCE the GDP........... can actually afford to pay what the government demands! "

 

Vague much? Individuals may have financial problems but statistically in aggregate these factors balance out. Just as they do with banks lending money or insurance companies setting rates.

 

What is a far more important factor when looking at government borrowing is what currency they're borrowing in. If it's their own currency, not much of a problem. Japan, for instance, has over a 200% ratio of debt to gdp. But it's all in yen. Some countries, like Argentina for one, borrowed in dollars. When its currency crashed, the debt ballooned and default followed. I don't know whether Thailand offers bonds in its own currency or in bonds tied to another currency like dollars.