Ekniti sets four-month deadline for new Thai economic model

Dr Ekniti Nitithanprapas, Deputy Prime Minister and Finance Minister, has set a four-month target to lay the foundations for a new national development model aimed at lifting Thailand out of its long-standing low-growth trap and moving the economy beyond its traditional structure amid tightening fiscal space and limited time.

He made the remark while delivering a special lecture on “Government and the drive to overhaul Thailand’s economic structure”, part of the Thailand Development Research Institute’s (TDRI) annual seminar under the theme Reimagining Thailand's Development Model.

Ekniti said that since taking office he has sought answers to how Thailand can “move beyond the old model” that has held back growth for many years, in the face of challenges such as sluggish expansion, reliance on legacy industries, weak investment, and an ageing society. 

At the same time, the “power of the state”—including budget capacity and fiscal strength—has continued to weaken.

He added that today’s situation is tougher than before: Thailand lacks a new model, and its fiscal capacity has eroded. 

Foreign observers and rating agencies are monitoring developments closely, he said, noting that one of the government’s early achievements was that S&P did not downgrade Thailand’s outlook after the administration signalled fiscal discipline through concrete actions.

Ekniti stressed that the biggest challenge is time. With only four months to establish a new foundation, every measure must be implemented immediately rather than merely planned. 

On his first day in office, he ordered the return of over 30 billion baht to the Bank for Agriculture and Agricultural Cooperatives (BAAC) at the first Cabinet meeting to send a clear signal of fiscal discipline.

For the new Medium-Term Fiscal Framework (MTFF), the government plans to introduce stricter fiscal rules, including reducing the deficit from 4.4% to 3% by 2029, capping the central fund at no more than 3%, and mandating that debt repayments in the budget must not fall below 4%.

The government also intends to restrict the use of Section 28, noting that “bank cheques will no longer act as banks”. Ministries will need to prioritise projects more carefully before seeking funding through specialised financial institutions. At the same time, Thailand will raise non-debt financing through instruments such as infrastructure funds.

Despite limited fiscal resources, the government will press ahead with investment using new financing tools, particularly infrastructure funds, which will require state-owned enterprises and agencies with future revenue streams to rely on these funds instead of borrowing. 

This approach, Ekniti said, will prevent an increase in public debt while improving governance by expanding private-sector participation.

A key example is the expansion of clean-energy projects such as solar farms, floating solar and solar rooftops. Revenue from future energy projects will be channelled into infrastructure funds, allowing Thailand to expand from two existing dams to seven or eight without adding to state debt.

As chairman of the Board of Investment (BOI), Ekniti said a large number of major investment projects remain stalled. Analysis shows that projects worth up to 470 billion baht could proceed immediately, including 74 projects valued at over 1 billion baht each—totalling more than 300 billion baht—currently hindered by overlapping barriers.

He identified three main obstacles: clean-energy capacity and electricity permits, work permits for foreign specialists, and land issues.

The government is also preparing a major SME reform package that goes beyond conventional soft loans. The new scheme will provide financing aimed at restructuring SME businesses so they can enter real supply chains.

Key measures include risk-sharing guarantees between the state, private sector and banks; using supply-chain purchase orders to help reduce bank risk; and upgrading the competitiveness enhancement fund to provide SMEs with operating capital. 

The concept is to encourage large firms to support smaller ones. The package is expected to be launched within two to three weeks.

For this year’s Khon La Khrueng (Let’s Go Halves) programme, the new “Plus” component focuses on reskilling vendors. The budget of over 40 billion baht—of which Bangkok accounts for only 10–14%—will be extended to upskill small traders in three core areas: sales techniques, cost literacy and cost reduction, and the use of digital tools to sell products.

Ekniti stressed that the next four months will be crucial in establishing the foundations for Thailand’s new development model, applying a strategy of “short-term fixes with long-term impact” across fiscal policy, investment, labour skills, and SME upgrading.

“The government aims for these measures to mark the beginning of Thailand’s structural transformation, helping the country escape the middle-income trap and move towards a stronger long-term development model,” he concluded.