BANGKOK, Sept.20 (Reuters) – Thailand has raised the ceiling on its public debt-to-gross domestic product (GDP) ratio from 60% to 70%, the finance minister said on Monday, allowing the government to raise more funds for help a struggling economy.
The Southeast Asian country faces its largest COVID-19 outbreak to date and stricter containment measures have affected economic activity, although some have been eased from this month .
The higher debt ceiling will allow the government to borrow more for medium-term fiscal policies if needed, while maintaining good debt servicing capacity, Finance Minister Arkhom Termpittayapaisith said in a statement.
The new debt limit was approved by the Fiscal and Monetary Policy Committee, chaired by Prime Minister Prayuth Chan-ocha. It will be reviewed at least every three years.
In July, the debt-to-GDP ratio was 55.59%.
Last month, Arkhom said Thailand’s debt-to-GDP ratio was still low compared to other countries despite large borrowing to finance the outbreak response.
The government has introduced a series of stimulus and relief measures since the pandemic with 1.5 trillion baht ($ 45.86 billion) in loans, including a 500 billion baht plan approved this year.
Last month, Bank of Thailand Governor Sethaput Suthiwartnarueput said the country would need another trillion baht in tax measures to help cushion job and income losses.
The finance ministry forecast Southeast Asia‘s second-largest economy to grow 1.3 percent this year, while the central bank forecast 0.7 percent growth.
Last year, the economy contracted 6.1%, the deepest drop in more than two decades.
Reporting by Kitiphong Thaichareon Writing by Orathai Sriring Editing by Ed Davies
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