Image from The Nation Thailand/ANN
BANGKOK (Bloomberg): Thailand’s lower house of parliament passed a 3.78 trillion baht (US$117 billion) annual budget, needed to support a fragile economy that’s at risk from issues ranging from the impact of higher US tariffs to a downturn in tourism.
The budget bill for the year starting Oct 1 was backed by 257 lawmakers in the 500-member House of Representatives late Friday, following a three-day debate. A total of 229 members opposed the spending plan.
The vote will be a relief to investors in the Southeast Asian nation, by avoiding a repeat of the months-long deadlock over spending plans seen in 2019.
The country faces a litany of problems, including political instability linked to the suspension of Prime Minister Paetongtarn Shinawatra; continued tensions with Cambodia which recently erupted into violent clashes; and a stiff 19% tariff on shipments to the US, Thailand’s biggest export destination.
Finance Minister Pichai Chunhavajira thanked the house for approving the budget and said the government will ensure the spending is efficient, transparent and delivers maximum benefit to the people. "I would like to assure that the policies, measures, and budget approved will be implemented in accordance with the designated objectives and plans,” Pichai said in a post on X.
The government has defended a marginal increase in spending for the year starting October, and a projected budget deficit of 860 billion baht ($27 billion), or 4.3% of gross domestic product. Officials say the outlays are necessary given the increased risks to the economy from global trade uncertainties.
The Senate will review the budget on Aug. 25-26, but analysts expect the spending plan to take effect on Oct. 1 as planned. The Constitutional Court will rule on Aug. 29 whether to disqualify Paetongtarn, amid allegations that she breached ethical standards in handling a border dispute with Cambodia.
"Put together, these developments increase the odds that the 2026 budget could be passed before the conclusion of Paetongtarn’s case, thereby removing the most significant headwind to growth as a result of the ongoing political crisis,” Citi Research said in a note to investors this week.
More support is coming for the economy. The Bank of Thailand on Wednesday cut its policy rate for the fourth time since October to the lowest level in more than two years to ease the burden for vulnerable groups.
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