Finance minister presents B3.79 trillion deficit budget to parliament

Govt, opposition both concerned about Thailand's financial health

The government and the opposition both expressed concern about Thailand's financial status when the finance minister presented his 2027 budget bill to parliament on Monday.

Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas told the parliament that the government planned to spend 3.79 trillion baht in fiscal 2027 and it would again be a deficit  budget because the government must stimulate the economy.

Mr Ekniti said fixed and necessary expenses of government are rising and the remaining investment budgets are falling.

He said economic stimulation is necessary. Public debt is approaching the statutory ceiling of 70% of gross domestic product. As of March 31, the public debt stood at 66.4% of GDP. The treasury balance was 340 billion baht.

The situation affects the long-term fiscal position of the country. To cope, the government must reduce the fiscal deficit to a ceiling of 3% of GDP by 2029 to strengthen the country's fiscal position. For fiscal 2026, the fiscal deficit is projected to remain at 4.4% of GDP.

“The 2027 Budget Bill is aimed at supporting people and the economy and laying a foundation for the strength of the nation. Budgets are precisely planned, with transparency, to allow the country to survive the twin crises of energy prices and the cost of living,” Mr Ekniti said.

Of the 3.79-trillion-baht 2027 budget, the government plans to spend 407 billion baht on security, 348 billion baht on competitiveness enhancement, 611 billion baht on human resources development, 960 billion baht on social equity, 137 billion baht on environment-friendly growth and 676 billion baht on the improvement of the government sector.

Mr Ekniti expected that next year Thai GDP would grow by 1.7-2.7% and inflation would run at 0.5-1.5%.

In reply, opposition People's Party MP Sirikanya Tansakun said the government was unable to increase its revenue to cover its growing expenses and so it was forced to borrow almost every year.

According to Ms Sirikanya, investment has been cut by about 70 billion baht while fixed expenses rose by hundreds of billions of baht - mainly for the government’s contingency fund, and for pensions and welfare for civil servants.

Democrat Party leader Abhisit Vejjajiva said the 2027 Budget Bill reflected the long-standing structural problems of the country and the government would have to solve the problems and lay new foundations for national development.

At present, the government’s revenue was enough only for fixed expenses and debt repayment, while investment spending depended completely on loans, he said.

According to Mr Abhisit, the tax-to-GDP ratio is at only 14.6%, which is historically low, while people continuously wish for welfare programmes from the government. He urged the government to revamp the taxation system.

Investment budgets are down by 13% and there are few investment projects that meet national demand, especially disaster response and infrastructure development projects, he said.

Although the government insisted that public debt stood at 66% of GDP, it could breach the 70% ceiling in the near future through additional borrowing, Mr Abhisit said.

Unless the government significantly increases national revenue, in 5-10 years public debt could amount to 80-90% of GDP and that would have a long-term impact on the financial status and development of the nation, he said.

Sirikanya Tansakun of the People's Party complains about growing expenses and shrinking investment. (Photo: Sirikanya Tansakun)