Thailand plans THB400bn emergency loan decree without raising debt ceiling
Thailand prepares THB400bn borrowing decree to cushion Middle East crisis impact, keeping public debt within 70% ceiling and using Covid-era project screening model
Thailand’s government is preparing to introduce an emergency borrowing decree worth THB400 billion as it seeks to cushion the domestic impact of escalating tensions in the Middle East, with officials insisting the move will not breach the country’s public debt ceiling.
The Ministry of Finance is expected to submit the proposal to the Cabinet for consideration on Tuesday (May 5), positioning the measure as a key fiscal tool to support the economy amid growing external risks.
The decision follows a comprehensive review by economic agencies of all available funding sources. These included the fiscal 2026 budget, central funds, emergency reserves, and even forward planning under the fiscal 2027 budget framework. However, authorities concluded that existing budget allocations would be insufficient to address the scale of the unfolding situation, necessitating additional borrowing.
According to officials, the borrowing will be conducted domestically and drawn down progressively in line with project requirements. The approach mirrors the model used under the THB1.5 trillion emergency loan decree implemented during the Covid-19 crisis.
Concerns over fiscal discipline have been addressed by the Ministry of Finance, which maintains that the new borrowing will not require an increase in the public debt ceiling, currently capped at 70% of gross domestic product (GDP).
As of March 2026, Thailand’s public debt stood at 66.38% of GDP, based on an estimated economic size of THB19.10 trillion. Even with the additional borrowing, the debt ratio is expected to rise only close to, but not exceed, the existing ceiling, remaining within the country’s fiscal framework.
Following Cabinet approval, the government is set to establish a dedicated project screening committee to oversee the allocation of funds. The panel, to be chaired by the permanent secretary for finance, will be responsible for assessing and prioritising proposals submitted by state agencies to ensure the most effective use of borrowed funds.
At the same time, relevant agencies are being instructed to accelerate the preparation of detailed project plans and justifications for the decree. These will be presented to both the House of Representatives and the Senate in accordance with legal procedures.
