Public Debt Nears 69% of GDP
The People’s Party has warned that Thailand’s public debt is approaching a critical threshold, projected to hit 13.5 trillion baht in the next fiscal year. MP Sirikanya Tansakun highlighted that this would push the debt-to-GDP ratio to 69%, leaving only about 210 billion baht in borrowing capacity.
Calls for Government Clarity
Finance Ministry Urged to Act
During a House committee review of the 2026 budget, Sirikanya pressed the Ministry of Finance to outline strategies for managing the looming debt crisis. She also urged the Bank of Thailand to address warnings of potential deflation driven by weakened consumer purchasing power.
Revenue Shortfalls Persist
Tax Collection Misses Targets
Sirikanya noted that 2024 tax revenue fell 80 billion baht short of projections, with the government relying on dividends from state enterprises like PTT Plc and funds from the Vayupak Fund to close the gap. In 2025, excise tax revenue has already missed targets by 33 billion baht.
Strain on State Enterprises
Forced to Cover Losses
State enterprises are under pressure to offset revenue deficits, tasked with generating up to 26.5% more income for the ministry. Sirikanya questioned which entities are responsible for this burden and whether the government has resolved underlying issues affecting excise tax collection.
Declining Tobacco Tax Revenue
Illegal Products Hurt Collections
Tobacco excise taxes have dropped by nearly 20 billion baht since 2017, largely due to reduced demand for legal products amid the rise of illegal e-cigarettes and smuggled cigarettes. This trend has compounded challenges in meeting fiscal targets, Sirikanya explained.
Budget Challenges Ahead
Expenditure Outpaces Revenue
With planned government spending of 3.78 trillion baht in the new fiscal year, securing sufficient revenue remains a hurdle. Sirikanya warned that the central contingency budget might be redirected to cover these costs, straining fiscal resources further.
Failure to Meet Debt Obligations
Treasury Reserves Tapped
The government fell short of its 11.3% interest payment target for prior borrowing in 2025, paying only 8% and drawing from treasury reserves. For 2026, Sirikanya criticized plans to pay 9.2% against an expected 11.5%, questioning the credibility of medium-term budgetary planning.
Debate Over Budget Cuts
Opposition Faces Pushback
Chanin Rungtanakiat, a House committee spokesperson, countered the People’s Party’s proposal to cut the 2026 budget by 50 billion baht, urging focus on understanding the necessity of proposed spending. The opposition’s concerns highlight the delicate balance between fiscal discipline and economic needs.
