The Cabinet has approved an increase in the fiscal 2024 borrowing limit by 276 billion baht, raising the total new borrowing for the year to 1 trillion baht. According to Deputy Government Spokeswoman Rudklao Intawong Suwankiri, the newly sanctioned funds will primarily support direct government initiatives and assist state enterprises in restructuring debts.
The borrowing adjustment is part of a revised public debt management strategy, which anticipates maintaining the public debt-to-GDP ratio at 65.1%, below the maximum threshold of 70% set by the government. As of the end of May, the ratio stood at 64.3%.
A significant portion of the additional borrowing, amounting to 500 billion baht, is earmarked for the 10,000-baht digital wallet handout. The initiative, expected to launch in the fourth quarter, is a key component of Prime Minister Srettha Thavisin’s economic revival plan, targeting to boost an economy that has averaged less than 2% growth over the past decade.
However, the Bank of Thailand and several economists have expressed concerns about the potential inflationary and fiscal risks associated with the cash handout scheme. The central bank has recommended that the scheme be limited to the 16 million citizens most in need, rather than the broader 50 million planned.
Additionally, the Cabinet has resolved to raise the fiscal 2024 budget by 122 billion baht to support this stimulus program. The revised debt plan includes provisions for increasing borrowing for the State Railway of Thailand and introducing new financing strategies for other state enterprises, a total new borrowing figure adjusted to 1.03 trillion baht.
The plan also involves a substantial restructuring of existing domestic loans and a reduction in foreign debt obligations for fiscal 2024, balancing new spending initiatives with ongoing debt management efforts to ensure fiscal stability. (NNT)
