Thai PM presents US$115 billion budget to parliament to support lacklustre economy

The Star

5 days ago

Thailand's Prime Minister Paetongtarn Shinawatra arrives ahead of a no-confidence vote at the parliament in Bangkok, Thailand, on Mar 26, 2025. - Photo: Reuters
BANGKOK: Thai Prime Minister Paetongtarn Shinawatra on Wednesday (May 28) proposed a 3.78 trillion baht (US$115.5 billion) budget to parliament for the 2026 fiscal year, as her government seeks to support a sluggish economy facing steep US tariffs.
The draft budget bill, which is being debated in the house over the next four days, projects a 0.7% rise in spending, and a 0.7% drop in the budget deficit to 860 billion baht, or 4.3% of gross domestic product, from the 2025 fiscal year that ends in September.
The proposed budget "aims to revive and drive the economy toward sustainable growth while improving the quality of life for the people in all aspects," Paetongtarn told parliament.
"Given the constraints on revenue and the global economic situation, the government is pursuing a deficit budget policy to maintain economic stability."
The budget plan projects growth at 2.3% to 3.3% for both 2025 and 2026, with inflation predicted at 0.5% to 1.5%.
The economy expanded 2.5% last year, lagging regional peers. The plan did not take into account the potential impact of US tariffs on its goods, which will be at 36% if a reduction cannot be negotiated before a moratorium expires in July.
The United States is Thailand's biggest export market. Southeast Asia's second-largest economy expanded an annual 3.1% in the first quarter, but the state planning agency last week slashed its full-year growth forecast range by a percentage point to 1.3% to 2.3% because of the US tariffs.
Opposition leader Natthaphong Ruengpanyawut accused the government of lacking a strategy for its spending.
"The concerning issue is not the borrowing itself but rather that the government is overspending without an investment plan or revenue strategy to support it," he said.
The bill will be put to a vote of parliament on Saturday (May 31), which will require support from the majority of lawmakers present.
The budget is expected to pass, but comes amid tensions in the Pheu Thai Party-led coalition, particularly with its biggest partner, the Bhumjaithai Party.
Disagreements have surfaced over the government's casino bill, which aims to legalise casinos within integrated complexes to boost tourism.
Rifts over constitutional reform and policy on the use and sale of cannabis, which was decriminalised in 2022 but is now facing tighter restrictions, have also strained the alliance.
If the budget does not pass, Paetongtarn, who came to power last year, could either step down and make way for a new premier elected by parliament, or dissolve the house and call a new general election. - Reuters