Bangkok (VNA) – The National Economic and Social Development Council (NESDC) has urged the Thai government to improve efficiency of government revenue collection and effectiveness of public spending as the country’s public debt is projected to reach 69.3% of gross domestic product (GDP) in 2029.
The council urged the government to strengthen its fiscal stability, especially by reducing the size of budget deficits.
The NESDC made the warning over the projected public debt which put the country at economic risk after the Thai cabinet approved the medium-term fiscal plan (2025-2029) of the State Fiscal and Financial Policy Committee.
The plan projected increasing the public debt-to-GDP ratio in the next five years, starting with 65.7% of GDP or 865.7 billion THB (24.88 billion USD) in 2025, 67.3% (860 billion THB) in 2026, 68.5% (758.6 billion THB) in 2027, 69.2% (721.9 billion THB) in 2028, and 69.3% (703.3 billion THB) in 2029.
The council noted that the projected public debt-to-GDP ratio was approaching 70%, which is the threshold for managing public debt under Section 50 of the State Fiscal and Financial Discipline Act of 2018.
The Thai government's revenue-to-GDP ratio remains below 15%, while the average budget expenditure-to-GDP ratio is still high. As a result, Thailand’s fiscal space will decrease and might not be sufficient to absorb economic risks, especially in a situation where global economic uncertainties remain high, it warned.
The NESDC said this could result in Thailand's economy growing lower than expected in the baseline scenario, leading to the public debt-to-GDP ratio exceeding the limit set by the State Fiscal and Financial Discipline Act.
Thus, the council said it is urgently necessary to strengthen the country’s fiscal stability, especially by prioritising the reduction of the overall budget deficit.
The council also suggested improving the efficiency of government revenue collection and the effectiveness of public spending, as well as the allocation of the government's debt repayment budget to align with the increasing debt and interest payments each fiscal year.
It is necessary to support long-term economic potential amid increasing complexity in future developments, including global economic volatility, climate change, and the transition to a super-aged society./.
