## Assessing Thailand’s Debt Ceiling—Room for Recalibration?

_Selected Issues Papers, May 9, 2025_

## Source details

**Canonical URL:** [Assessing Thailand’s Debt Ceiling—Room for Recalibration?](https://www.imf.org/en/publications/selected-issues-papers/issues/2025/05/09/assessing-thailands-debt-ceiling-room-for-recalibration-566877)

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## Bibliographic details
- Authors: Seunghwan Kim
- Published: May 9, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229011495.018

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### Summary and central finding
- The pandemic responses and subsequent fiscal stimulus measures have eroded Thailand’s fiscal space, pushing its public debt close to the ceiling of 70 percent of GDP.
- While this situation generally calls for fiscal prudence to reduce debt levels, it also raises questions about the adequacy of the current debt ceiling.
- The paper uses various approaches to assess Thailand’s public debt threshold, beyond which debt could become unsustainable or negatively impact growth.
- Stochastic simulations are used to account for potential impact of macroeconomic and fiscal shocks in calibrating an appropriate debt ceiling for Thailand.

### Methodology
- Uses various approaches to assess public debt threshold for Thailand.
- Employs stochastic simulations to incorporate potential macroeconomic and fiscal shocks.

### Policy implications and considerations
- The proximity of public debt to the ceiling of 70 percent of GDP suggests a need for fiscal prudence to reduce debt levels.
- The assessment questions the adequacy of the current debt ceiling and provides an analytic basis for potential recalibration based on estimated thresholds and shock scenarios.

### Subject areas and keywords
- Subject: Asset and liability management, COVID-19, Debt limits, Fiscal policy, Fiscal rules, Fiscal stance, Health, Public debt
- Keywords: COVID-19, Debt ceiling, Debt limits, Eastern Europe, estimates of debt limits, fan chart, fiscal rules, Fiscal stance, Global, public debt debt ceiling, summary of debt limit, Thailand's debt ceiling

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/05/09/assessing-thailands-debt-ceiling-room-for-recalibration-566877_