The Thai government’s newly appointed cabinet has given the green light to a plan that involves higher spending for the fiscal year 2024, amounting to 3.48 trillion baht (approximately $97.29 billion). Simultaneously, they have approved a larger budget deficit of 693 billion baht. These significant financial adjustments are part of the government’s strategy to stimulate economic growth.
According to an official government statement, they are anticipating a 3.2% increase in the country’s Gross Domestic Product (GDP) in the upcoming year. Alongside this growth projection, they have set a target for the public debt-to-GDP ratio to reach 64% by the conclusion of the 2024 fiscal year. These targets are part of a revised medium-term plan extending until fiscal year 2027.
The government recognizes the need for expansionary fiscal policies, particularly through deficit budgeting, to provide the necessary support for economic growth while simultaneously strengthening the fiscal sector.
The budgeting process for the year 2024 has faced delays due to the recent change in government, which officially took office only a month ago, following the May election. Consequently, the state planning agency expects the budget to be prepared and finalized in April 2024, which is well after the start of the new fiscal year in October.
Prime Minister Srettha Thavisin is scheduled to convene a meeting to review and consider the proposed budget plan on Thursday. The budget adjustments are aligned with the new administration’s agenda, led by the populist Pheu Thai Party. Their policies aim to alleviate the cost of living, provide debt relief for farmers, increase minimum wages, and distribute financial assistance to all adult Thai citizens through digital wallets. These measures are designed to revitalize an economy that has been experiencing challenges.
In contrast to the budget previously approved by the former government earlier this year, which forecasted a 5.18% increase in spending to 3.35 trillion baht, the revised budget allocates more resources. This includes 717 billion baht dedicated to various investments. Moreover, the earlier budget projection anticipated a 14.68% reduction in the budget deficit, bringing it down to 593 billion baht, equivalent to 3% of the GDP.