Thailand approves $37.5 billion borrowing plan for fiscal 2027
Thailand is setting up a larger financing program for the fiscal year that begins in October as it funds budget needs and energy transition projects. The plan puts projected public debt at 69.7% of GDP by the end of September 2027, close to the government's 70% ceiling.
Highlights
- Thailand's cabinet approved 1.26 trillion baht ($37.5 billion) in new borrowing for fiscal 2027, including 200 billion baht for energy transition projects.
- The government plans to issue up to 1.28 trillion baht in bonds and is increasing short-term borrowing, with an average debt cost of 2.6% expected to remain steady.
- The projected public debt ratio will reach 69.7% of GDP by September 2027, putting Thailand near its 70% debt ceiling and raising fiscal scrutiny.
Fiscal 2027 borrowing structure
As reported by Reuters, citing the Thai finance ministry, the cabinet has approved 1.26 trillion baht in new borrowing for fiscal 2027, equivalent to about $37.5 billion. The package includes 200 billion baht for energy transition projects under a broader borrowing decree.The government also plans to issue up to 1.28 trillion baht in government bonds during the fiscal year. Jindarat Viriyataveekul, who heads the Public Debt Management Office, says authorities are increasing short-term borrowing and using instruments such as treasury bills and term loans while long-term bond yields remain elevated.
She says the government plans to refinance shorter-term borrowing into longer-term debt once long-term yields decline. Higher yields are not expected to affect state borrowing costs, with the average cost currently around 2.6% and seen staying unchanged in the coming fiscal year.
Debt ceiling pressure and economic outlook
The projected public debt ratio of 69.7% of GDP leaves Thailand close to its official ceiling of 70% by the end of the fiscal year ending in September 2027. That places the new borrowing program under close fiscal scrutiny as the government balances funding needs against debt limits.Finance Minister Ekniti Nitithanprapas told Reuters last week that he expects the economy to grow 2.5% in 2027, supported by investment-led policies. That outlook suggests Bangkok is relying on public financing and capital spending to help sustain growth momentum next year.
In our earlier article on tightening emerging-market funding conditions, we explained how higher borrowing needs in developed economies and elevated U.S. Treasury yields can siphon investor capital and make external financing more challenging. We also noted that the impact is uneven across countries, with markets facing larger refinancing needs and higher sensitivity to U.S. yield moves experiencing greater volatility as inflation risks and geopolitical uncertainty persist.
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