Thailand's 2026 Budget Proposal: Balancing Growth Amidst Tariff Challenges

Thai Prime Minister Paetongtarn Shinawatra has put forward a 3.78 trillion baht budget proposal for the 2026 fiscal year, currently under debate in parliament. The budget, designed to support the nation's sluggish economy amidst steep U.S. tariffs, outlines plans for a 0.7% spending increase.

Projected to reduce the budget deficit to 860 billion baht, or 4.3% of GDP, the proposal aims to drive sustainable economic growth while enhancing citizens' quality of life. Despite criticisms from the opposition about a lack of a clear revenue strategy, the budget is expected to pass in the upcoming vote.

Inter-coalition tensions within the Pheu Thai Party-led government have been exacerbated by contentious issues such as the casino legalization bill and tighter cannabis restrictions. Failure for the budget to pass could result in significant political shifts for the current government.

(With inputs from agencies.)