Thailand is facing growing fiscal risks, with a key government body warning that the nation’s ability to service its debt is weakening.
According to a report by the National Economic and Social Development Council (NESDC), the ratio of interest payments to government revenue is on track to exceed 12% by 2027—a level that could trigger a downgrade to Thailand’s credit rating.
The NESDC’s report, released as part of its economic outlook for Q2 2025, highlighted the importance of this metric for international credit rating agencies.
A downgrade to a non-investment grade could make borrowing more expensive for the country and potentially signal to investors that its economy is a riskier bet.
To address this mounting concern, the NESDC recommends that the government dedicate a larger portion of its budget to repaying the principal on its loans, particularly the significant debt accumulated during the COVID-19 pandemic.
This would not only improve the country’s debt-servicing capacity but also create more fiscal space for future economic policies.