It is expected to run a fiscal deficit of Bt146.2 billion. The ministry would mainly issue bonds to finance the deficit in order to maintain the momentum of the bond market, said Pongpanu Svetarundra of the ministry's Fiscal Policy Office.

Pridiyathorn also suggested other debt instruments should be in place in case the bond market is not conducive, Pongpanu said.

Pongpanu said the ministry may next year issue government bonds worth at least Bt310 billion, as the ministry has to finance a budget deficit and convert its treasury bill worth about Bt170 billion into long-term bonds.

The ministry plans to manage public debt worth Bt986.76 billion for the 2007 fiscal year. The budget bill is expected to be enforced by January 3. The new public debt does not increase the level of total public debt, which stood at 41 per cent of gross domestic product by the end of fiscal year 2006.

The ministry also wants to reduce public foreign debt from 14 per cent of total public debt to 8.5 per cent.

At the beginning of fiscal year 2006, the government had foreign debts worth US$13.5 billion (Bt495 billion) but they dropped to $10.9 billion by the end of the fiscal year.

Wichit Chaitrong

The Nation