The government has assured that its borrowing of 2.59 trillion baht for the 2025 fiscal year will not interfere with the fundraising efforts of the private sector, according to a Ministry of Finance official on Wednesday.
Jindarat Viriyataveekul, a public debt advisor at the ministry, stated that the debt plan for the upcoming fiscal year, beginning on October 1, should not raise concerns in the markets.
Of the total borrowing, approximately 1.1 trillion baht will be new debt primarily aimed at financing the budget deficit, while the remainder will be allocated for refinancing and restructuring existing debt.
Under Prime Minister Paetongtarn Shinawatra’s administration, the budget for the 2025 fiscal year is set to increase to 3.75 trillion baht, reflecting a 7% rise from 2024 in efforts to stimulate growth.
Southeast Asia’s second-largest economy is grappling with near record-high household debt, sluggish exports, and a manufacturing sector affected by low-cost imports, predominantly from China.
The 2025 borrowing plan includes 1.25 trillion baht in sovereign bonds, 140 billion baht through bond switching, 520 billion baht in Treasury bills, and 120 billion baht in savings bonds. The remaining amount may consist of promissory notes and term loans.
Increased Public Debt
Public debt is projected to reach 66% of gross domestic product (GDP) by the end of September next year, assuming a 3% economic growth rate, Finance Minister Pichai Chunhavajira announced on Wednesday. This figure remains below the 70% legal ceiling but rises from 63.7% at the end of July 2024.
The authorities are also hopeful about issuing dollar-denominated bonds as part of the 2025 borrowing program. A plan to issue the first dollar-denominated debt in two decades was abandoned earlier this year due to unfavorable market conditions.
Officials anticipate revenue of 2.88 trillion baht for the new fiscal year, resulting in a budget deficit of 865 billion baht.
Despite the increased deficit, 908 billion baht has been allocated for investments, representing a 27.9% rise from the 2024 fiscal year, according to officials.
Additionally, 152.7 billion baht of the budget is designated for the second phase of the digital wallet consumption stimulus program, with the first phase, costing approximately 145 billion baht, set to commence next week.
Another 132 billion baht for the program is expected to be sourced through the management of other budgets, including the central budget and unspent funds from other agencies.
