By Orathai Sriring and Satawasin Staporncharnchai
BANGKOK, August 25 (Reuters) – Thailand’s fiscal position remains strong and it can raise its public debt ceiling if necessary, the country’s finance minister said on Wednesday, as the Southeast Asian nation faces its worst COVID outbreak -19 to date.
The country’s epidemic and stricter containment measures have struck economic activity while tourism is still in difficulty.
Despite significant loans financethe epidemic reply, the country’s debt-to-gross domestic product (GDP) ratio was still low relative to its peers at 56%, and is expected to remain below its 60% cap at the end of this fiscal year through September, Arkhom Termpittayapaisith said at a business conference.
“If it is necessary to increase our debt ceiling, the fiscal policy committee (…) can review and raise this threshold,” he said.
The government will work hard to stimulate the economy, especially by gradually reopen the country, to maintain its GDP growth target of 4-5% next year, he said.
For 2021, the ministry forecasts GDP growth of 1.3%, while the central bank forecasts 0.7%. Last year, the economy contracted 6.1%, the biggest drop in more than two decades.
The government has introduced various stimulus and relief measures since the pandemic with a total of 1.5 trillion baht ($ 45.86 billion) in borrowing, of which 500 billion baht was approved this year.
The government has leeway to engage in more “stimulus firepower” if needed with much lower costs, Bank of Thailand Governor Sethaput Suthiwartnarueput said at the conference. He recently recommended that the government to borrow 1,000 billion additional baht.
The economy has been fairly resilient to shocks with limited downside risks and is likely to be much more resilient to a possible ‘cone tantrum ”than in many other countries because of its strong external position and banking sector, he said, referring to the impact of the withdrawal of U.S. stimulus.
($ 1 = 32.71 baht)
(Report by Orathai Sriring and Satawasin Staporncharnchai edited by Ed Davies)
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