Budgeted spending, which is coming off a high base in 2024, will rise substantially in 2025

Spending under the 2025 budget will be the highest on record as the government tries to support economic growth

Thailand’s budget bureau has released details on the country’s spending plans for the 2025 fiscal year, which spans from October 1, 2024 to September 30, 2025. The budget envisions a 4.3% YOY increase in spending, totaling THB 3.75 trillion (US$103 billion). This spending plan is notable since the 2025 budget builds on a high base. In the 2024 budget, planned spending rose by a remarkable 13.0% YOY. The 2025 budget is the largest on record with the highest projected fiscal deficit of THB 865.7 billion (US$24 billion), equivalent to 4.3% of Thailand’s GDP. If enacted, it will increase Thailand’s debt load to around 65% of GDP, which is not too far off its self-imposed ceiling of 70%.

Although the budget has been approved in principle by Thailand’s House of Representatives, it still needs to pass a second and third vote in August and receive Senate and royal approval, which it will likely do before its October 1 implementation. However, there is a risk that the budget could be revised and spending delayed if PM Srettha is ousted due to the ongoing court case against him.

Business Implications

The 2025 budget will provide demand opportunities for both B2B and B2C firms:

  • B2B firms that serve demand in key sectors such as education, transport, and healthcare should look to capitalize on increased spending in these areas. Firms should also look to partner with the government on infrastructure projects as and where suitable since Thailand’s leaders plan to raise infrastructure spending sharply in the 2025 fiscal year.  
  • B2C firms should expect overall spending to remain resilient through 2025 due to continued government subsidy support, which has been instrumental in supporting consumption over the last year.  
  • B2C firms should also develop plans to capitalize on a potential boost in consumer spending from Q4 2024 to Q1 2025 due to the government’s digital cash handout program, which has the potential to improve consumer purchasing power among the low- and middle-income segments, particularly for non-durable and staple goods. However, firms should not build these plans into forecasts as of now, since the legal case against the PM could lead to the cancellation of this program.

2025 budget expenditure will be focused on a range of different areas

The budget underscores PM Srettha’s commitment to invigorating Thailand’s sluggish economic growth through increased expenditure in key areas:

  • Healthcare: Increased funding will largely go towards bolstering the Universal Coverage Scheme, including the expansion of the 30 Baht Treatment Everywhere Project.
  • Education: Resources will be allocated to improve educational infrastructure, advance digital learning, and foster research and innovation in higher education institutions.
  • Agriculture: Slated to rise by 4.2% YOY, agriculture expenditure will support the government’s broader objective of elevating farmer incomes by cutting production costs and assisting farmers with marketing strategies and technological advancements.
  • Digital Cash Handout Program: The budget allocates THB 152.7 billion (US$4.2 billion) for PM Srettha’s flagship digital cash handout initiative. Under this program, 50 million Thai citizens will receive THB 10,000 (US$275) each to spend in their localities from Q4 2024 to Q1 2025. However, businesses should be aware that this program could be terminated if the PM is removed from office.
  • Energy Subsidies: While reduced from 2024 levels, the budget will continue to provide energy subsidies aimed at controlling inflation.
  • Infrastructure: The investment budget will see a substantial 27.9% YOY increase to THB 908 billion (US$25 billion), with the majority of funds earmarked for enhancing transportation networks as well as energy and public utility infrastructure.

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