Thailand is planning to reduce its government borrowing by around 8% in the upcoming fiscal year starting October, aiming to maintain fiscal discipline as the nation’s public debt approaches the legal ceiling, according to sources familiar with the matter.
Of the total planned borrowing, roughly 992 billion baht (about 42% of the 2.37 trillion baht total) will be new debt mainly intended to cover the budget deficit. The remaining amount will be allocated for refinancing and restructuring existing debt. These sources, who requested anonymity due to restrictions on discussing the information prior to official announcement, disclosed that the Public Debt Management Office held a virtual meeting with bond traders on Friday afternoon.
The debt management office is expected to issue approximately 1.3 trillion baht in government bonds during the next fiscal year, with debt auctions scheduled at no more than 322 billion baht for the October-December period, the sources added.
Patchara Anuntasilpa, Director-General of the Public Debt Management Office, declined to comment on the specific plan. The government has decided to target borrowing only for projects with definitive plans and may revise the borrowing strategy later if necessary. This plan represents a continuation of the current fiscal year’s borrowing increase of 8%.
Thailand’s public debt is projected to continue rising annually through 2029, approaching the cap of 70% of gross domestic product set by the government, with Reuters having previously reported on the plan.
Additionally, Thailand’s local bonds have yielded the highest returns in Asia for dollar-based investors this year on a currency-hedged basis, with an 18% return. The Thai baht has also been the top-performing currency among emerging markets after the Taiwanese dollar, appreciating over 7% against the US dollar.