Huge deficit in 2025 fiscal year
The government has laid bare its plans for the 2025 fiscal year, unveiling a colossal budget deficit of 713 billion baht.
This unprecedented move comes hand in hand with a staggering increase in spending, soaring to 3.6 trillion baht, leaving citizens and experts alike scratching their heads.
The ambitious forecast also includes a predicted gross domestic product (GDP) growth of 3.6% in 2025, a revelation made in an official statement following the cabinet’s approval on Tuesday. The fiscal year is scheduled to kick off on October 1 next year.
Defending this audacious move, the government justified the substantial deficit.
“The government still needs a short-term deficit budget to support continued economic expansion and stability.”
Such a colossal budget shortfall hasn’t been witnessed since Thaksin Shinawatra’s last year in office back in 2006.
The spending plan for 2025 projects inflation rates ranging from 1.5% to 2.5%, and an anticipated public debt-to-GDP ratio of 63.73% at the fiscal year’s conclusion. A stark comparison to the 2024 budget, which still lingers in limbo due to the prolonged government formation post-elections, calls for spending of 3.48 trillion baht with a deficit of 693 billion, reported Bangkok Post.
Deputy Finance Minister Julapun Amornvivat confirmed the delay, stating that the 2024 budget is unlikely to take effect until early May. The Cabinet, however, seems undeterred, having given the green light to the budget bill, set for its first reading in the House on January 3 and 4, according to Prime Minister Srettha Thavisin.
The jaw-dropping budget for 2025 signifies a colossal 9.3% increase in total spending compared to the previous fiscal year. Srettha shed light on the allocation, revealing that of the 3.48 trillion baht, a staggering 2.53 trillion will be directed towards fixed annual expenditure.
In a move to boost treasury reserves, 118.36 billion baht (3.4% of the budget) is set aside, while 715.4 billion (20.5%) is designated as investment funds. The remaining funds, the PM-cum-finance minister assured, are to be allocated for the repayment of loans.
