Thailand has decided to increase its public debt ceiling to gross domestic product (GDP) ratio to 70%, from the current 60%, to allow the government to borrow more to rehabilitate the economy devastated by the COVID-19 pandemic.

Finance Minister Arkhom Termpittayapaisith said the decision was agreed at a meeting of the fiscal and monetary board today, to give the government more room to manoeuver in case it needs fresh borrowing to implement medium-term fiscal policies, while it is still in a position to service its debts.

The minister insisted that the adjustment is in line with Section 50 of the State Fiscal and Monetary Disciplines Act, which stipulates that the government can adjust the ratio between public debt and GDP every three years at least.

In the course of the COVID-19 pandemic, the government has rolled out multiple stimulus packages, to boost the ailing economy and to help many working people affected by its impacts. Each package costs taxpayers’ tens of billions of baht, while collection of tax revenue has fallen short of targets.