Penny-wise, pound foolish: Thailand’s budget delay leaves fiscal year in arrears

The Government of Thailand’s delayed budget approval led to significant underinvestment in the previous fiscal year, according to the Comptroller General’s Department (CGD).

The state budget for the fiscal year is divided into a fixed fund and an investment fund. For fiscal 2024, which ended on September 30, the fixed fund amounted to 2.8 trillion baht (US$84 billion), covering expenses such as civil service salaries. The CGD reported that this fund was over-disbursed at 101%, according to Patricia Mongkhonvanit, the department’s director-general.

In contrast, the investment portion of the budget saw a disbursement of only 440 billion baht (US$13 billion), or 65.1% of the available funds. This rate fell short by 10 percentage points from the target disbursement rate of 75%.

The remaining unused investment funds have been earmarked for use in the first and second quarters of the current fiscal year, extending up to March, Patricia stated. The total national budget for the previous fiscal year was 3.4 trillion baht (US$103 billion).

Patricia explained that the investment fund was underutilised because the budget bill was approved by Parliament in April, seven months behind schedule. The delays were attributed to the lengthy process of forming the government after the 2023 elections, which hindered agencies’ ability to execute many investment projects on time, said Patricia.

“In the previous fiscal year, the minimum spending target for the fixed fund was set at 98% of the available budget, with a 75% target for the investment portion.”

For the current fiscal year, the minimum spending target for the fixed fund remains capped at 98%, reported Bangkok Post.

In related news, the Government of Thailand announced a borrowing plan of 2.59 trillion baht for the 2025 fiscal year, assuring that this will not hinder the private sector’s fundraising efforts, a Ministry of Finance official stated.

Jindarat Viriyataveekul, public debt adviser at the ministry, said the debt plan, which begins on October 1, should not cause concern in the markets.