The government will ensure that its borrowing of 2.59 trillion baht for the 2025 fiscal year won’t “crowd out” the fundraising activities of the private sector, a Ministry of Finance official said on Wednesday.
The debt plan for the new fiscal year starting on Oct 1 should not concern markets, said Jindarat Viriyataveekul, public debt adviser at the ministry, told reporters.
About 1.1 trillion baht will be fresh borrowing to mainly finance the budget deficit, while the rest has been earmarked for refinancing and restructuring existing debt, she said.
The government of Prime Minister Paetongtarn Shinawatra is raising the budget for the 2025 fiscal year to 3.75 trillion baht, an increase of 7% from 2024, to boost growth.
Southeast Asia’s second-largest economy is facing near record-high household debt, sluggish exports and a manufacturing sector weakened by cheap imports, mainly from China.
The 2025 borrowing plan includes 1.25 trillion baht worth of sovereign bonds, 140 billion baht via bond switching, 520 billion baht of Treasury bills, and 120 billion baht in savings bonds. Promissory notes and term loans may make up the rest.
Higher public debt
Public debt is expected to reach 66% of gross domestic product, assuming 3% economic growth, by the end of September next year, Finance Minister Pichai Chunhavajira said on Wednesday. That is still below the 70% ceiling set by law but up from 63.7% at the end of July 2024.
He said authorities hope to issue dollar-denominated bonds as part of the 2025 borrowing programme. A plan to issue the first dollar-denominated debt in two decades earlier this year was scrapped because market conditions were deemed unfavourable.
Officials have forecast revenue of 2.88 trillion baht for the new fiscal year, leaving a budget deficit of 865 billion baht.
Although the deficit is higher, 908 billion baht is set aside for investment, representing a 27.9% increase from the 2024 fiscal year, officials pointed out.
They said 152.7 billion baht of the budget is earmarked for the second phase of the digital wallet consumption stimulus handout. The first phase, costing about 145 billion baht, is scheduled to start next week.
Another 132 billion baht to fund the programme is expected to come via management of other budgets, such as the central budget and unused funds at other agencies.