Delayed state projects likely to increase public debt, PDMO says
The Public Debt Management Office has conceded that delayed state projects could push up the nation's public debts, with consistent budget deficits for three or four years, while expecting the public debt to reach 52 per cent of gross domestic product by
Theerat Attanavanij, deputy director-general of the PDMO, said some state projects had been delayed and budgets would not be disbursed as targeted.
As a result, the office will adjust its public-debt-management plan for the third time, particularly concerning the railway double-tracking project.
That project has been delayed by difficulties in its environmental impact assessment (EIA). This results in a drop of Bt125 billion in borrowings for fiscal 2015.
Under the PDMO’s adjusted plan, borrowings will likely rise by Bt638 billion. Of these, about Bt390 billion will be for the main state budget and the remainder for investment in state and state-enterprise projects.
Most of the planned borrowings are expected to come from local sources, with a limit on external borrowings at Bt60 billion.
Under this plan, the public debt is expected to reach 48.3 per cent of GDP in fiscal 2016.
The public-debt-management plan for fiscal 2016 will be proposed to the Cabinet for approval this month.
In June, the public-debt level was 42.36 per cent of GDP or Bt5.68 trillion. By the end of this year, the figure is expected to reach 44.9 per cent of GDP because of additional borrowings of more than Bt200 billion, which would be added to this fiscal year’s budget deficit.
Theerat said public-debt management was still within the framework of fiscal sustainability although additional borrowings would likely add to the deficits for the next three or four years.
The public debt is expected to stand at 51 per cent of GDP in 2017, likely rising to 52 per cent in 2018 and 53 per cent in 2019, and likely falling to 52 per cent in 2020.
These figures would still be within the fiscal-sustainability framework, as compared with the high public debt of 61.7 per cent of GDP in 2000. The fiscal-sustainability framework sets the maximum public debt at 65 per cent of GDP.
