Govt unveils 60-billion-baht plan to revive economy, proposes Let’s Go Halves and debt relief

Prime Minister and Minister of Interior Anutin Charnvirakul presented the government’s policy to parliament on September 29-30, 2025, emphasising that with limited time, no 2026 budget, and a minority government, urgent action is required across the economy, security, society, natural disasters, environment, and legal reforms.

The Cabinet to hold a meeting immediately after the policy statement at 18:00 on Tuesday, empowered to approve budgets and assign or transfer civil servants.

The Cabinet will consider managing remaining funds from the 2025 Emergency and Urgent Reserve Budget, totalling approximately 62 billion baht, to stimulate the economy.

Paradon Prissanananthakul, Minister attached to the Prime Minister’s Office, explained that the special Cabinet meeting will allocate these funds in two parts:

1. Let’s Go Halves Plus –22 billion baht will be transferred to the State Welfare Fund for Economy and Society to support the scheme for 13 million welfare card holders.
2. Government debt repayment – 35 billion baht will be paid to state-owned banks, including the Bank for Agriculture and Agricultural Cooperatives (BAAC), to settle obligations from previous projects such as rice pledges and cassava compensation, as well as to other state-owned banks. This repayment reduces debt under Section 28 of the Public Financial Discipline Act, which caps debt at 30%, creating room for new 2026 projects through state banks and allowing temporary relief for citizens under the policy.

Meanwhile, Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas is preparing a debt relief scheme for small borrowers, targeting individuals with debts of up to 100,000 baht, covering 1-2 million eligible participants.

The scheme will allow debtors of state banks, including BAAC, Krung Thai Bank, Government Savings Bank, and Government Housing Bank, to pause repayments, with the government covering the interest. Additional measures for handling non-performing loans (NPLs) will also be implemented.

Sources of the 60-billion-baht Let’s Go Halves fund

Paradon explained that the Let’s Go Halves Plus project will use a total budget of 60 billion baht, divided into three groups:

1. State Welfare Card holders: 13 million people will receive an additional 1,700 baht per month, added to the existing 300 baht, giving a total of 2,000 baht per month in a single instalment, with no need to re-register. This portion uses 22 billion baht, sourced from unspent 2025 budget allocations to the State Welfare Fund.
2. Registered taxpayers: 11 million people who file personal income tax returns will see the 50:50 subsidy adjusted to 60:40. They will receive 2,400 baht from the government, while citizens contribute 2,000 baht, spending up to 200 baht per day. This group receives the highest allocation to incentivise spending.
3. Non-registered taxpayers: 9 million people will receive a top-up of 2,000 baht.

The budget for groups 2 and 3 totals approximately 40 billion baht, to be sourced from the 2026 fiscal year.

The government will open new registrations at the start of October. Participants from Let’s Go Halves Phase 5 do not need to re-register, while those from earlier phases or who have never participated must register again. Funds will be available for use from the end of October, using the “Pao Tang” app as before.

Risks of technical recession as strong baht and slow growth hit economy

Yunyong Thaicharoen, CEO of the Economic and Sustainability Research Division at the Siam Commercial Bank’s Economic Intelligence Centre (SCB EIC), warned that Thailand’s economic growth remains sluggish, with GDP projected at 1.8% this year and 1.5% next year. Growth in the second half of 2025 is expected to fall below 1%, and Q3 could even contract compared to the previous quarter.

EIC highlights a high risk that Thailand could enter a technical recession, driven by weakening export momentum, resulting in a slowdown extending into 2026.

Yunyong noted that, following four to five years of post-COVID growth averaging 2.0-2.1%, the current environment represents a new reality, with growth potentially remaining below 2% for two consecutive years.

He said the Thai baht has appreciated sharply, reaching its strongest level in four years in September — nearly 8% stronger — erasing the competitive advantage it had since 1997. Compared with regional currencies such as the Vietnamese dong, Thailand is now at a 10-11% disadvantage in trade.

A strong baht is also affecting tourism, as foreign arrivals have started to decline or flatten out. Yunyong warned that the current situation — a weak economy paired with a rising currency — could act as a shock amplifier, further impacting exports and tourism.

Rising foreign exchange reserves may also reflect intervention by the Bank of Thailand to slow baht appreciation, alongside increased valuation of reserve assets.

SCB EIC highlighted potential scrutiny from the US regarding FX manipulation, noting that Thailand has already met two of three criteria: a current account surplus exceeding 3% of GDP and a trade surplus with the US exceeding US$15 billion. The third criterion — foreign reserve purchases exceeding 2% of GDP — requires close monitoring.

Inflation has been negative or near zero for five consecutive months, with a projected 2025 rate of 0.1%, well below the central bank’s 1-3% target. Persistently low inflation could harm investment and employment, reduce wages, and compress business profits, potentially triggering debt deflation, where declining purchasing power and profits further slow the economy.

Public debt is capped at 70% of GDP, but EIC projects this ratio could exceed 70% by 2027 if spending reforms are not implemented, including reducing populist expenditures, cutting non-essential spending, and reallocating resources to economic restructuring.

Yunyong emphasised that although the current government has been in office for only four months, it should communicate a clear fiscal reform plan to the public and credit rating agencies. Failure to do so could risk a sovereign downgrade, raising borrowing costs by 20-40 basis points, particularly for large domestic firms with foreign loans.