Thai Prime Minister plans to present a proposed budget of approximately 4 trillion baht to the parliament, aiming to bolster a struggling economy.
Thailand's Prime Minister, Paetongtarn Shinawatra, is set to present a 3.78 trillion baht (US$115.5 billion) budget to parliament on Wednesday for the 2026 fiscal year. This proposed budget aims to shore up a sluggish economy contending with steep US tariffs.
The draft budget bill, to be debated over the next four days, expects a 0.7% increase in spending and a 0.7% decrease in the budget deficit to 860 billion baht or 4.3% of GDP. The budget deficit reduction is in contrast to the current fiscal year that ends in September.
"The goal of a deficit budget policy is to maintain economic stability while supporting recovery and promoting growth at an appropriate level," the bill stated.
The budget projection is pegged at 2.3% to 3.3% for both 2025 and 2026, with an anticipated inflation rate of 0.5% to 1.5%. The economy grew 2.5% last year, below regional peers.
It's noteworthy that the budget plan does not account for the potential impact of US tariffs. Thailand faces a possible 36% US tariff if a reduction cannot be negotiated before the moratorium ends in July. In the interim, the US has set a 10% baseline tariff for most countries.
Thailand's exports to the US constitute 12-15% of its total exports. The imposition of such tariffs could result in a significant reduction of industrial exports, potentially cutting them by around 200 billion baht in 2025. The tariffs may also curb industrial GDP growth by 1.02 percentage points.
In an effort to offset these losses, the government plans to generate revenue via measures such as the Entertainment Complex bill, which permits casino operations within integrated entertainment complexes. This bill is intended to help alleviate losses due to the new US tariffs. The cabinet has additionally approved a stimulus package of THB157 billion to mitigate the impact of these tariffs.
In conclusion, the 2026 budget proposal reveals a modest budget increase and strategic measures to counterbalance US tariffs, aiming to maintain economic stability and promote growth despite challenging circumstances.
Top stories in finance and business highlight Thailand's efforts to counteract the potential impact of US tariffs on its economy, as the 2026 budget proposal includes a stimulus package of THB157 billion and the generation of revenue through measures like the Entertainment Complex bill. The budget, aiming to maintain economic stability while supporting recovery and promoting growth, does not account for the full potential impact of US tariffs, which could reduce industrial exports by around 200 billion baht and curb industrial GDP growth by 1.02 percentage points.
