The Public Debt Management Office (PDMO) says Thailand will miss the COVID-19 stimulus borrowing target this fiscal year, ending in September, as the government is spending too long identifying the right projects.
The PDMO needs to wait for projects to be ready first, while the National Economic and Social Development Council (NESDC) is still vetting the list of proposals, according to the source.
To make the matter worse, it is likely that the resignation of the new Finance Minister Predee Daochai will further the delays.
As of June 30, 2020, the public debt outstanding of Thailand stood at 7,433,103 million baht which accounted for 45.83 per cent of the GDP.
The largest proportion was government debt which amounted to 6,357,205 million baht or 85.53 per cent of the total debt, while the second was the state enterprise debt at 755,508 million baht or 10.16 per cent.
Local newspapers reported that the public debt would surge to 58 per cent of GDP by the end of the fiscal year 2021, which is near the 60 per cent limit point, as a result of government assistance measures to cope with the COVID-19 impact and lowered household income.
Low hopes on the stimulus
The Thai government has announced many projects to help recover the economic downturn of 2 trillion baht since April, but they all seem to receive lower-than-expected participation.
According to the research of MayBank Kim Eng, the “Corporate Stabilization Fund” had nearly zero participation and the “We Travel Together” program ending October 2020 had less than 1 million rooms booked, missing the target of 5 million rooms.
Analysts continue to have doubts over the extension of the travel stimulus, which was set to earn 22.4 billion baht, as the program is still beyond the affordability of most people.
The “We Travel Together” program is one of the 400 billion baht rehabilitation plans which already has a long list of project proposals. So far, only 101 billion baht of the budget has been approved.
Most of the stimulus budget was still not reaching the point. The team turned to the normal disbursement of the fiscal budget to stimulate the economy due to uncertain efficacy and effectiveness, said MayBank Kim Eng analysts.
