The government's interest payment burden remains relatively low despite the continued increase in public debt, according to the head of the Public Debt Management Office (PDMO).Jindarat Viriyathavikul, director-general of PDMO, said interest payments on the government's outstanding borrowing account for 10.2% of projected government revenue, below the 12% threshold used by credit rating agencies as an indicator of whether a sovereign bond should be considered a junk bond.
However, rating agencies do not use the same methodology as PDMO to assess the government's interest burden. PDMO's calculation includes interest payments on borrowing by state-owned enterprises, whereas rating agencies exclude such payments.
As a result, the ratio of government interest payments to projected revenue used by rating agencies in assessing Thailand's sovereign credit rating is only 6-7%, well below the relevant benchmark.
According to Mrs Jindarat, as of April Thailand's public debt tallied 66.7% of GDP, below the government's fiscal discipline ceiling of 70%. The office has been managing borrowing costs and debt-related risks prudently, and is confident the public debt-to-GDP ratio will remain below the 70% threshold for four years, she said.
