Bangkok: The Palang Pracharath Party spokesman has issued a stark warning to the government regarding its current spending habits, suggesting that the nation is on the brink of financial instability due to excessive borrowing and fiscal mismanagement. The spokesman assured that the Palang Pracharath Party will not align with the government, hinting at deeper political rifts.
According to Thai News Agency, Pol. Lt. Gen. Piya Tawichai, the spokesman for the Palang Pracharath Party (PPRP), expressed concerns about the government's intention to borrow 500 billion baht, drawing a parallel to the tax policies of former US President Donald Trump. The PPRP's economic policy team, led by former finance ministers Dr. Uttama Savanayana and Mr. Sontirat Sontijirawong, along with Mr. Thirachai Phuvanatnaranubala, have previously cautioned the government, especially in light of the International Monetary Fund's (IMF) recent downgrade of Thailand's economic growth forecast. The IMF has lowered the projection for 2025 from 2.9% to 1.8%, making Thailand the only ASEAN country with such a significant revision.
Lt. Gen. Piya emphasized that extending the public debt ceiling to 75-80% would undermine Thailand's fiscal stability. With the current public debt standing at 173.98 billion US dollars, or 45.34% of GDP, concerns about repayment capabilities are mounting. He warned that increasing public debt could lead to a financial crisis, placing an unnecessary burden on citizens.
Dr. Uttama highlighted that Thailand's state income, currently at 14.87% of GDP, is insufficient for emergency budget allocations. The budget deficit ratio stands at 4.5% of GDP, surpassing the ideal 3% for fiscal stability. The government's plans to borrow to cover the 2025 deficit, nearing the maximum loan ceiling, further jeopardizes fiscal discipline and investor confidence.
Lt. Gen. Piya criticized the government's spending on the 10,000-baht handout project, aimed at vulnerable groups and costing over 200 billion baht, as a misuse of public funds. He also questioned the effectiveness of the government's soft power projects, noting the involvement of controversial figures such as Mr. Lawrence Ho, which has sparked skepticism among grassroots communities.
He criticized the distribution of funds without tangible results and warned that this could exacerbate the public debt issue. He suggested that the government might eventually resort to adjusting the 2025 economic stimulus budget and utilizing domestic financial resources, avoiding foreign loans or IMF funding due to potential parliamentary approval challenges.
In response to rumors about the Palang Pracharath Party joining the government, Lt. Gen. Piya stated that the decision lies with Gen. Prawit Wongsuwan, the party leader, and the executive committee. He reiterated the leader's stance against joining, implying that the Pheu Thai Party must navigate its relationship with the Bhumjaithai Party and others, despite internal challenges.