Thailand gives nod to additional borrowing for fiscal 2024

Thailand’s cabinet has approved an additional THB276 billion ($7.4 billion) in borrowing for the 2024 fiscal year, of which THB269 billion is for direct government use as well as for state-owned enterprises (SOEs) to restructure debt, reported local media.

That will bring total new borrowing in the fiscal year to 1 trillion THB, deputy spokesperson of the Government Radklao Suwankhiri told a news briefing on July 2.

Thai cabinet members also endorsed a proposal by the Ministry of Finance to revise the public debt management plan for the 2024 fiscal year, she said, adding that after the adjustment, the public debt-to-GDP ratio is forecast to stay at 65.1%, still below the ceiling of 70% of GDP.

The debt-to-GDP ratio stood at 64.3% at the end of May, up from 63.8% the previous month.

Meanwhile, government spokesman Chai Wacharonke said the additional borrowing will be used to fund the digital wallet handout, scheduled to begin in the fourth quarter, at a cost of 500 billion THB.

The cash handout to 50 million Thais is the centrepiece of Prime Minister Srettha Thavisin’s strategy to lift the economy out of a sub-2% average economic expansion over the past decade.

The plan is opposed by the Bank of Thailand (BOT) and some economists for its potential inflationary and fiscal impact. The central bank has advised the Government to limit the benefit to only those in need, estimated at 16 million people.

In May, the country's cabinet approved a plan to increase the 2024 fiscal budget by 122 billion THB to help finance the stimulus programme.

Rudklao noted that the additional loan of 276 billion THB is intended to support projects of the State Railway of Thailand and the new debt restructuring plan for SOEs, along with an additional loan of 3.47 billion THB from domestic sources.

The funds will be spent on development projects of four SOEs, including the Provincial Waterworks Authority and the Metropolitan Electricity Authority, she added.