Prime Minister Srettha Thavisin attended the final day of the spirited debate on the national budget bill for the 2025 fiscal year. The bill swiftly sailed through its first reading in the House of Representatives on Friday night. (Photo: Chanat Katanyu)
In a decisive move to inject life into the sluggish economy, Prime Minister Srettha Thavisin announced on Friday that the government will unveil a series of additional measures next week. This announcement follows his comprehensive discussions with Finance Minister Pichai Chunhavajira on Thursday night, focusing on economic stimuli and the stock market.
“A major announcement covering short-term, medium-term, and long-term economic measures will be made on June 24 or 25,” the prime minister revealed. When asked if this forthcoming news would be positive, Mr. Srettha playfully responded, “Let’s wait and see.”
In a bid to address inflation concerns, Mr. Srettha disclosed that Finance Minister Pichai will also engage in discussions with Bank of Thailand (BoT) governor Sethaput Suthiwartnarueput on the nation’s inflation target. Amid queries regarding the government’s approach following the BoT governor’s disagreement on adjusting the inflation target, Mr. Srettha emphasized that the discussions aim to reconcile their differing viewpoints. “It is the duty of Mr. Pichai,” the prime minister affirmed, noting that adjusting inflation targets is just one of several strategies to rejuvenate the economy.
The government and the central bank have been at odds for months over interest rates, with the prime minister advocating for a rate cut to stimulate economic activity. However, the BoT maintained the key interest rate steady at 2.50% following a recent review, with the next rate review scheduled for August 21.
Reflecting on his early days in office, Mr. Pichai had hinted at reconsidering the 1% to 3% inflation target set by the central bank. While the BoT has previously stated that both interest rates and the inflation target are currently appropriate, the annual inflation rate in May was recorded at 1.54%.
These renewed discussions are happening against a backdrop of political uncertainty that has unsettled markets, with courts currently considering several significant cases, including a call for the removal of the prime minister following the appointment of the controversial politician Pichit Chuenban as a PM’s Office minister.
Meanwhile, the opposition Democrat Party on Friday launched an attack on the government’s budget bill for the 2025 fiscal year during a heated debate in parliament. Romtham Khamnurak, a Democrat MP for Phatthalung, criticized the budget for relying on borrowing to finance the government’s digital-wallet handouts, which he argued would exacerbate the country’s debt burden.
The proposed fiscal 2025 budget features a deficit of approximately 865 billion baht, a 24.9% increase from the previous year’s earmark. Romtham highlighted that the government would need to borrow significantly to cover the deficit, pushing the country perilously close to the borrowing limit imposed by law. He added that total public debt stood at 11.3 trillion baht, or 62.5% of GDP, as of February, with projections indicating it could rise to 70% within the coming months.
Under the 2025 budget, regular expenditure amounts to 2.7 trillion baht, compared to the estimated revenue of 2.88 trillion baht that the government expects to collect. “That’s why the government has to come up with the budget deficit and try to borrow,” Mr. Romtham explained.
Romtham also noted that the 805-billion-baht central fund should be reserved exclusively for emergency spending. “However, the government plans to allocate 152.7 billion baht from the central fund to finance its digital-wallet scheme,” he criticized, warning of potential financial risks.
On May 28, the cabinet approved a substantial budget bill worth 3.75 trillion baht for the 2025 fiscal year, set to commence on October 1 and conclude on September 30 next year. Around 152.7 billion baht was earmarked for the government’s ambitious 500-billion-baht digital money handout, with an additional 122 billion baht from the 2024 fiscal budget allocated for the same purpose.
As of the press time on Friday, parliament had yet to start voting on the 2025 budget bill. The engaging three-day debate on the government’s spending plan commenced on Wednesday morning.
I think PM Srettha’s new economic measures might inject some much-needed stimulation into the economy.
Stimulus? Seriously? We’re already in a heap of debt! This is just a recipe for disaster.
It’s not about the debt per se, Dan. It’s about getting the economy moving again. Sometimes you have to spend money to make money.
That’s wishful thinking, Alice! We can’t just keep piling on debt and hoping it solves everything. It’ll ruin our future.
I agree with you, Alice. The economy needs a push, and targeted measures could help.
The opposition’s critique of the budget makes sense to me. Too much reliance on borrowing!
It’s not about borrowing but about investment in the future. Timing is key.
But isn’t there a risk if we overextend ourselves? What about the emerging debt ceiling issue?
Exactly! Fiscal responsibility matters too. Politicians keep ignoring the debt, but it will catch up with us.
Politicians are always squabbling over budgets, but nothing ever changes.
That’s because they aren’t really interested in change. It’s all about optics and keeping their power.
Where exactly is this 500-billion-baht digital money handout coming from? Sounds like a vote-buying scheme.
So we continue to fight over interest rates and inflation targets while the common people suffer. Typical.
It’s more complex, Jen. These policies affect the economy at large, not just a few individuals.
That’s the problem, Tim. The policies cater to the economy ‘at large’ while leaving the most vulnerable behind.
I don’t care what measures they put in place, as long as they bring down inflation. Everything’s so expensive!
We’ve heard these promises before. Nothing good will come of it.
Don’t underestimate the central bank. They know what they’re doing by keeping interest rates steady.
But maybe they need to cut rates to stimulate the economy, Louis. Times have changed.
Stability is key, Rina. Too much change too quickly can be disastrous.
Can anyone explain why inflation targets are such a big deal? I’m confused…
Inflation targets help ensure price stability, which is crucial for economic planning and growth.
The 152.7 billion baht from the central fund for digital money seems like an unnecessary risk. We should focus on sustainable growth.
I can’t believe people are still arguing about this. Just get the budget approved and move on already.
Will Srettha’s measures have any real impact? I’m skeptical. These policies often over promise and under deliver.
You do have a point. But sometimes new approaches are necessary to tackle persistent problems.
Maybe, but the track record of such measures isn’t great.
The national budget debates are always just political theater. Nothing substantial will come out of it.
Politicians need to address people’s real issues instead of just giving lofty promises.
Digital-wallet handouts seem like a bad idea. People need jobs, not handouts.
It’s a short-term relief measure, Walker. Jobs are the long-term solution but take time.
So we’re just supposed to trust that everything will work out with these new measures? Seems naive.
I think the government is trying its best under difficult circumstances. Let’s give them a chance.