Total borrowing, in part to fund digital wallet, now tops B1 trillion for fiscal 2024

The cabinet has approved an additional 276 billion baht in borrowing for the 2024 fiscal 2024, of which 269 billion is for direct government use as well as funds for state enterprises to restructure debt.

The change will bring total new borrowing in the fiscal year ending on Sept 30 to 1 trillion baht, deputy government spokeswoman Rudklao Intawong Suwankiri told a news briefing on Tuesday.

Ministers also approved a proposal by the Ministry of Finance to revise the public debt management plan for fiscal 2024, said Mrs Rudklao.

After the adjustment, the public debt-to-GDP ratio is forecast to stay at 65.1%, still below the framework ceiling of 70% of GDP, she added.

The debt-to-GDP ratio stood at 64.3% at the end of May, up from 63.8% the previous month.

Government spokesman Chai Wacharonke admitted the additional borrowing would be used to fund the 10,000-baht digital wallet handout, scheduled to begin in the fourth quarter and to cost 500 billion baht.

The cash handout to 50 million Thais, to be spent in their home district, is the centrepiece of Prime Minister Srettha Thavisin’s strategy to lift the economy out of a sub-2% average economic expansion in the past decade.

The plan is opposed by the Bank of Thailand (BoT) and some economists for its potential inflationary and fiscal impact. The central bank has advised the government to limit the benefit to only those in need, estimated at 16 million people.

The cabinet in May approved a plan to increase the fiscal 2024 budget by 122 billion baht to help finance the stimulus programme.

Mrs Rudklao said the revised public debt plan includes a net increase in new borrowing by 276 billion baht, bringing the total to 1.03 trillion.

She said the adjustment includes an increase in borrowing for the State Railway of Thailand and a new debt plan for state enterprises, with additional borrowing of 3.47 billion baht from domestic sources.

The funds will be used for investment in development projects for four state enterprises, including the Provincial Waterworks Authority and the Metropolitan Electricity Authority, said Mrs Rudklao.

The newly approved borrowing is part of a wider revision of the debt management plan for existing debt and debt repayments.

The existing debt management plan increases by 33.4 billion baht, from 2 trillion baht to 2.04 trillion.

The increase includes a rise in domestic debt management of 66.7 billion baht, which involves restructuring loans due in fiscal 2024 totalling 16.7 billion baht and restructuring loans due from 2025 to 2028 totalling 50 billion.

Conversely, foreign debt management will decrease by about 26 billion baht in fiscal 2024.

The debt repayment plan has a net increase of 54.6 billion baht, rising from the original total to 454 billion baht.