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Thailand raises public debt ceiling to fight COVID-19 outbreak By Reuters


© Reuters. FILE PHOTO: A staff member prepares to open a restaurant on the first day of coronavirus restrictions lift on retail and dining in Bangkok and other high-risk areas to revive the economy, as the country battles its worst coronavirus disease (COVID-19) out

BANGKOK (Reuters) – Thailand has increased the ceiling of its public debt-to-gross domestic product (GDP) ratio to 70% from 60%, the finance minister said on Monday, allowing the government to raise more funds to help a struggling economy.

The Southeast Asian country is dealing with its biggest COVID-19 outbreak to date and stricter containment measures have hit economic activity although some have been eased from this month.

Arkhom Termpittayapaisith from Finance said that the new debt ceiling would allow the government more money to finance fiscal policies over the medium term, but maintain its debt servicing capabilities.

Prim Minister Prayuth Chau-ocha presided over the fiscal and monetary policies committee that approved the debt limit. The limit will be reviewed at minimum every three years.

The debt-to GDP ratio stood at 55.59% as of July.

Arkhom reported last month that Thailand’s ratio of debt to GDP was at 55.59%. This is despite the fact that Thailand borrowed a lot in order to pay for its response.

After the pandemic, the government adopted a variety of relief and stimulus measures. It borrowed 1.5 trillion baht (45.86 million dollars) to finance it. The plan was approved by this year at 500 billion baht.

Bank of Thailand Governor Sethaput Suthiwartnarueput stated last month that the country will need 1 trillion baht more in fiscal measures in order to offset income and job losses.

While the central bank predicted 0.7% growth, Southeast Asia’s second-largest economies will see 1.3% growth this year according to the finance ministry.

The economy suffered a 6.1% decline last year. This was the largest drop in over two decades.

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