Thailand to borrow 2.59 trillion baht for 2025 budget

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 yesterday.

Jindarat Viriyataveekul, public debt adviser at the ministry, said the debt plan, which begins on October 1, should not cause concern in the markets. She explained that approximately 1.1 trillion baht (US$33 billion) would be new borrowing primarily to cover the budget deficit, with the remainder designated for refinancing and restructuring existing debt.

Prime Minister Paetongtarn Shinawatra’s administration is increasing the budget for the 2025 fiscal year to 3.75 trillion baht (US$113 billion), a 7% rise from 2024, aimed at stimulating economic growth.

Southeast Asia’s second-largest economy is grappling with near-record-high household debt, weak exports, and a manufacturing sector under pressure from inexpensive imports, mainly from China.

The 2025 borrowing strategy includes 1.25 trillion baht (US$38 billion) in sovereign bonds, 140 billion baht (US$4 billion) through bond switching, 520 billion baht (US$16 billion) in Treasury bills, and 120 billion baht (US$3.6 billion) in savings bonds. The rest may be covered by promissory notes and term loans.

Finance Minister Pichai Chunhavajira noted that public debt is projected to reach 66% of gross domestic product (GDP) by the end of September next year, assuming a 3% economic growth rate. This figure remains below the 70% legal ceiling but is an increase from 63.7% at the end of July 2024, Pichai said.

“Officials hope to issue dollar-denominated bonds as part of the 2025 borrowing programme,”

A plan to issue the first dollar-denominated debt in two decades earlier this year was abandoned due to unfavourable market conditions.

Officials have forecast revenue of 2.88 trillion baht (US$87 billion) for the new fiscal year, resulting in a budget deficit of 865 billion baht (US$26 billion). Despite the higher deficit, 908 billion baht (US$27.4 billion) is allocated for investment, marking a 27.9% increase from the 2024 fiscal year, Pichai said.

“152.7 billion baht (US$4.696 billion) of the budget is earmarked for the second phase of the digital wallet consumption stimulus handout.”

The first phase, costing about 145 billion baht (US$4.4 billion), starts next week, reported Bangkok Post.

Additionally, another 132 billion baht (US$4 billion) for the programme is expected to be sourced from the management of other budgets, including the central budget and unused funds from various agencies.