IMF warns Thailand's public debt exceeds ASEAN average, urges prudent fiscal policy

Amid global uncertainty—particularly stemming from U.S. tax policy under President Donald Trump—the International Monetary Fund (IMF) has downgraded its global economic growth forecast to 2.8% from a previous estimate of 3.3%.

On the morning of April 23 (U.S. time), or evening Thailand time, the IMF released its global fiscal outlook during the “Fiscal Monitor” press briefing at the IMF-World Bank Spring Meetings in Washington, D.C. The Fund highlighted a rising trend in global public debt and expressed concern that Thailand’s public debt is higher than the ASEAN average.

Era Dabla-Norris, Deputy Director of the IMF’s Fiscal Affairs Department, responded to a question from Krungthep Turakij newspaper about the public debt situation in ASEAN and Thailand. She noted that fiscal conditions vary significantly across ASEAN countries, with the region generally maintaining a lower debt-to-GDP ratio than other emerging markets.

However, Thailand’s public debt stands at over 60% of GDP, slightly higher than its ASEAN peers. Therefore, the IMF advises the Thai government to implement careful and efficient fiscal policies.

“On average, ASEAN countries have lower debt-to-GDP ratios than other emerging and developing economies. But in Thailand, the debt level is somewhat higher than the ASEAN average, exceeding 60% of GDP,” said Dabla-Norris.

Global public debt projected to reach 100% of GDP

Mauricio Soto, public finance expert at the IMF, warned that global public debt is expected to rise above 95% of GDP in 2025, outpacing the surge seen during the COVID-19 pandemic. The debt level could approach 100% of GDP by the end of this decade, surpassing previous pandemic-era peaks.

Soto emphasized the urgent need for finance ministers around the world to take decisive action to stabilize debt levels.

“In these highly uncertain times, fiscal policy must anchor confidence and stability, laying the foundation for a competitive economy that promotes growth and shared prosperity,” Soto said. He stressed the importance of fair taxation, smart spending, and long-term planning.

Thai government eyes massive economic stimulus

Pichai Chunhavajira, Deputy Prime Minister and Finance Minister of Thailand, stated that in light of current domestic economic conditions, the government is planning a large-scale stimulus package—expected to exceed 500 billion baht.

The stimulus will focus on three key areas: stimulating consumer spending, boosting domestic investment, and providing soft loans.

He mentioned ongoing discussions with the National Economic and Social Development Council (NESDC) and the Bank of Thailand (BOT) regarding funding sources.

When asked whether the stimulus could increase public debt, Pichai responded that the focus should not solely be on debt levels.

“Many countries carry high debt, but what matters is how the money is used. If it stimulates enough economic growth, the debt-to-GDP ratio will decrease,” he explained.

Live report by Satid Sutipanya, Krungthep Turakij reporter, from Washington D.C., USA.