Srettha defends Thailand’s deficit budget for fiscal 2025
PM says more government spending will not only boost the manufacturing sector, but will also put cash in people’s hands
Prime Minister Srettha Thavisin defended the larger deficit ratio in the fiscal 2025 budget, saying his government will spend more on investments to try and revive the sluggish economy.
The premier, who returned on Wednesday after taking time off due to a Covid infection, personally defended the budget on the House of Representatives floor. Initially, it was suspected that the bill would be defended by Commerce Minister Phumtham Wechayachai, who is also deputy PM.
The budget bill seeks to allocate 3.7 trillion baht to government spending against a projected revenue of 2.8 trillion baht.
The planned spending will include 2.7 trillion baht for fixed expenditures, 908 billion baht for investments and 150 billion baht for loan repayments, he said.
In the debate, Srettha told the House that his government would borrow 865 billion baht to offset the deficit. He said that though the deficit ratio will be higher than fiscal 2024, his government will allocate a larger portion to investments.
He said the government has earmarked some 908 billion baht for investment, which is 27.9% more than the funds allocated in fiscal 2024 and the highest in 17 years.
Srettha said his government planned a deficit budget to implement policies that will stimulate the economy, but the spending will be carried out within the framework of the government’s fiscal discipline.
The stimulus measures will put cash in people’s pockets and financial liquidity in the financial sector, resulting in sustainable economic development, Srettha said.
One such measure, he said, was handing out 10,000 baht in the form of a digital wallet to 50 million Thais late this year, he said. This handout will create an economic storm rising from the grassroots level and resulting in higher spending, increased manufacturing and higher employment, he said.
Srettha added that the government will get this money back in the form of taxes, which it will spend on boosting the country’s competitiveness.
The premier explained that a deficit budget that stimulates the economy is necessary because of a high household debt ratio, currently at 91.3% to the GDP, and the issue of non-banking loans. Worse yet, he said, most of the country’s 3.2 million or so SMEs still failed to access bank loans.
“A deficit budget is crucial and necessary to revive the economy so there is significant growth. A lot of money will flow from the state to the private sector, resulting in spending on goods and services, as well as continued circulation in the economic system,” the PM explained.
