Monday, October 26, 2020

Govt to borrow Bt1.3 trillion, as public debt borders fiscal sustainability threshold

Sep 30. 2020
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By The Nation

The Cabinet on Tuesday approved the public debt management plan proposed by the Finance Ministry for fiscal year 2021 (October 2021 to September 2021), Government Spokesman Anucha Burapachaisri said.

The Finance Ministry’s Public Debt Management Office plans to borrow Bt1.3 trillion and manage existing debt totalling Bt387.5 billion.

The ministry said facilitating recovery of the economy hard hit by the Covid-19 pandemic and financial aid packages to support affected people and corporations had resulted in large budget deficits. The government also wants to borrow more to boost economic activities and its cash flow.

Should the government go ahead with the borrowing plan, public debt will jump to 57.23 per cent of gross domestic product, close to the sustainable level of 60 per cent of GDP. As of July 31, public debt stood at Bt7.6 trillion, or equivalent to 47.04 per cent of GDP, according to the Public Debt Management Office.

In related development, the Cabinet also approved a Bt1.51-trillion spending plan for 44 state enterprises for fiscal 2021.

Combined with other state enterprises' spending, the expenditure of all 52 state enterprises would be Bt1.55 trillion of which capital spending is Bt432 billion. The capital spending is expected to boost economic growth, said Rachada Dhnadirek, deputy government spokeswoman.

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