NESDC rings alarm bell as Thailand’s public debt approaches 70% of GDP
Council calls for improving efficiency of government revenue collection and effectiveness of public spending
Thailand’s projected public debt in 2029 at 69.3% of gross domestic product (GDP) could put the country at economic risk, The National Economic and Social Development Council (NESDC) has warned.
The council urged the government to strengthen its fiscal stability, especially by reducing the size of budget deficits.
The NESDC was commenting on the medium-term fiscal plan (2025-2029) of the State Fiscal and Financial Policy Committee, which was recently approved by the Cabinet.
The plan projected increasing the public debt-to-GDP ratio in the next five years, starting with 65.7% of GDP or 865.7 billion baht in 2025, 67.3% (860 billion baht) in 2026, 68.5% (758.6 billion baht) in 2027, 69.2% (721.9 billion baht) in 2028, and 69.3% (703.3 billion baht) in 2029.
The council noted that the projected public debt-to-GDP ratio was approaching 70%, which is the threshold for managing public debt under Section 50 of the State Fiscal and Financial Discipline Act of 2018.
Additionally, the government's revenue-to-GDP ratio remains below 15%, while the average budget expenditure-to-GDP ratio is still high. As a result, Thailand’s fiscal space will decrease and might not be sufficient to absorb economic risks, especially in a situation where global economic uncertainties remain high, it warned.
“This could result in Thailand's economy growing lower than expected in the baseline scenario, leading to the public debt-to-GDP ratio exceeding the limit set by the State Fiscal and Financial Discipline Act,” the NESDC said. “It is therefore urgently necessary to strengthen the country’s fiscal stability, especially by prioritising the reduction of the overall budget deficit.”
The council also suggested improving the efficiency of government revenue collection and the effectiveness of public spending, as well as the allocation of the government's debt repayment budget to align with the increasing debt and interest payments each fiscal year.
“Additionally, it is necessary to support long-term economic potential amid increasing complexity in future developments, including global economic volatility, climate change, and the transition to a super-aged society,” the council added.
