The issue of public debt has always been the subject of discussion, especially with the recent emergency loans taken out by the government to resolve the COVID-19 crisis. The Public Debt Management Office has ensured that the government can afford these loans.
The debt-to-GDP ratio in Thailand is constantly changing, sometimes reaching 59.98% in the year 2000. The limit was 60% at that time.
The public debt ratio in Gen Prayut Chan-o-cha’s administration is rising and falling with most loans taken to fund infrastructure projects and quality-of-life improvement campaigns.
In the COVID-19 pandemic, the government addressed a huge need for money to support the health care system, stimulate the economy, and provide financial assistance to the general public. To make matters worse, the government is seeing a decrease in its revenue from taxation, because people are earning less. Because of this condition, it is necessary for the government to seek a loan, resulting in higher public debt.
Public Debt Management Office (PDMO) Director-General Patricia Mongkhonvanit said the government needs to raise the public debt ceiling, which will allow it to implement more financial measures.
He said these measures are intended to help improve the economy, while the government remains able to repay these loans.
In the pandemic, the government’s average revenue stream from taxation became insufficient to cover increased spending. The number of people who filed their personal income tax last year was approximately 11-12 million, out of a population of 66 million, with only about 2 million paying their taxes in full.
The government is now expected to lose 17 billion baht from its revenue stream, due to the recently introduced excise tax cut for diesel fuel. The decline in income necessitates the government’s decision to take out emergency loans, so that it can take care of people in need. (NNT)