Bangkok: Kriengsak Chareonwongsak has voiced strong opposition to the Thai government's plan to increase the public debt ceiling to 75%, arguing that the move could result in a severe debt burden and potential credit downgrades.
According to Thai News Agency, Professor Dr. Kriengsak Chareonwongsak, a Senior Academic at Harvard University, and President of both the Institute for National Development and the Institute for Future Studies for Development, has outlined concerns over Thailand's public debt trajectory. Over the past two decades, the country's public debt has transitioned from post-crisis recovery to significant borrowing for crisis management and public investment. The debt ratio has notably increased, particularly during the COVID-19 pandemic, rising from 41% to 60.6% of GDP by 2022. As of February 2026, Thailand's public debt stands at 12.60 trillion baht, or 66.09% of GDP, nearing the current 70% ceiling.
Kriengsak highlights that if an additional 500 billion baht is borrowed, the debt could rise to 13.1 trillion baht, pushing the debt-to-GDP ratio to approximately 68.6-69.1%, leaving minimal fiscal space. In scenarios of lower-than-expected economic growth, public debt could surpass 70% before the next fiscal year. The medium-term fiscal plan forecasts continued debt growth, potentially reaching 69.32% by 2029. The debt repayment ratio is also expected to rise significantly, indicating that Thailand is already close to breaching its debt ceiling, with any increase bearing substantial costs.
Kriengsak argues against raising the debt ceiling to 75%, citing several reasons. The first is that debt is increasing faster than the economy's capacity to generate income, with GDP growth projected at only 1.9% for 2026. The second reason is the potential crowding-out effect on private sector investment, as increased government borrowing could raise financing costs, hindering private businesses. Furthermore, raising the debt ceiling could limit the government's capacity to respond to future economic shocks.
He also points out that welfare spending will rise due to an aging population, which could strain future budgets if revenue growth doesn't match increasing expenditures. Additionally, raising the debt ceiling without a clear fiscal recovery plan could harm Thailand's credit rating, increasing borrowing costs and damaging the country's credibility.
Kriengsak proposes several policy solutions, advocating for maintaining the debt ceiling at 70% during 2026-2027, reallocating existing budgets, leveraging state enterprise assets, encouraging private sector investment, and implementing specific tax measures. He also suggests targeted government spending on vulnerable groups, accelerating investment in productive projects, reforming revenue generation, and proactive debt management.
The overarching message is clear: Thailand is not yet in a position to permanently accept increased debt without risking structural challenges. Kriengsak emphasizes that the appropriate policy at this time is to refrain from raising the public debt ceiling to 75% in 2026, and possibly not in 2027, if current conditions persist.