Finance Ministry to inject over 500 billion baht to boost GDP above 1.8%
The Finance Ministry aims to inject over 500 billion baht into the economy to boost Thai GDP above 1.8%, with a focus on stimulating consumption, investment and providing soft loans.
This comes in response to the International Monetary Fund (IMF) revising Thailand’s 2025 GDP growth forecast downward from 2.9% to 1.8%, citing the impact of US reciprocal tariffs. Thailand remains the only ASEAN country whose GDP projection has been cut to below 2%. For 2026, the IMF anticipates a further decline to 1.6%.
Finance Minister Pichai Chunhavajira said that he views the IMF forecast as a preliminary assessment. He does not believe Thailand’s GDP will fall as sharply as predicted, noting that the current situation remains uncertain.
He acknowledged that US President Donald Trump’s tariff policies may have some impact, but affirmed that the government is closely monitoring developments and stands ready to implement stimulus measures to cushion the GDP slowdown and sustain growth at prior levels.
“The economic stimulus package must be substantial enough to drive momentum. Personally, I believe at least 500 billion baht will be necessary, and the focus will be on domestic initiatives—stimulating consumption and investment, as well as soft loans,” Pichai stated.
He added that the source of funding remains under review, with several options being considered. Consultations are ongoing with key agencies, including the National Economic and Social Development Council (NESDC) and the Bank of Thailand.
When asked whether the funding would increase the debt-to-GDP ratio, Pichai said that many countries operate with higher debt levels. “What matters is how the money is used. If it leads to economic expansion, the debt-to-GDP ratio could actually decline,” he explained.
Finance Ministry Permanent Secretary Lavaron Sangsnit affirmed that Thailand’s fiscal position remains robust.
He emphasised that the 500-billion-baht stimulus package must be deployed strategically, noting that stimulating domestic consumption could deliver swift economic gains. Investment, he added, is equally vital to support structural economic reform.
Lavaron said that the final decision on the funding source has yet to be made. Options include budget reallocation, utilisation of the remaining 150 billion baht from previous stimulus efforts, and mobilising funds from state financial institutions for lending purposes.
Details of the proposed projects should become clearer by next month, pending further global economic developments.
Regarding a potential increase in the public debt ceiling to 75–80%, Lavaron played down concerns, noting that many countries manage debt levels of up to 80% or even 100% of GDP.
“The key issue is not the ceiling itself, but how the funds are used and the government's ability to repay its debts,” he said.
If the government proceeds with borrowing an additional 500 billion baht, it would increase the public debt-to-GDP ratio by just over 3%, bringing it from the current level of 64.21%.
