As public debt is expected to reach B13.5 trillion in the coming fiscal year, the proportion of debt to gross domestic product (GDP) is estimated to reach 69%, People’s Party MP Sirikanya Tansakun said at a meeting of the House committee vetting the fiscal 2026 budget bill on Wednesday (June 11).
This means only about B210bn more could be borrowed, so the government could seek to expand the public debt ceiling, said Ms Sirikanya, who worked as an economic researcher before entering politics, reports the Bangkok Post.
Ms Sirikanya called on the Ministry of Finance to explain how it would cope with the situation, while urging the Bank of Thailand to respond to recent analyses that pointed to the likelihood of Thailand plunging into deflation, mainly due to weak purchasing power.
She said that according to the 2024 budget report, tax revenue collection fell short of the target by nearly B80bn.
The finance ministry attempted to balance the books before the end of the fiscal year in September 2024 by relying on dividends from PTT Plc, along with funds from the Vayupak Fund and the Government Lottery Office.
She said a similar pattern appears to be repeating in the first seven months of fiscal year 2025 that began last Oct 1, with excise tax revenue already missing the target by B33bn.
Under the circumstances, state enterprises are now forced to shoulder these losses and struggle to find as much as 26.5% more revenue for the ministry, Ms Sirikanya said.
Her question, she said, was which state enterprises are held responsible for finding the extra revenue.
She also inquired whether the factors hindering the ministry from achieving its excise tax target in fiscal 2025 had been addressed before it lowered the target to B31bn for the coming fiscal year.
Tobacco excise tax, for instance, has fallen by almost B20bn since 2017, due mainly to falling demand for tobacco products, resulting from the rising popularity of both illegal e-cigarettes and smuggled cigarettes, said Ms Sirikanya.
The government’s expenditure, meanwhile, is estimated at B3.78 trillion in the new fiscal year, but it will be difficult to find sufficient revenue to fund it, she said.
As a result, the central contingency budget would likely be diverted to fund these huge expenses, she said.
The government in this fiscal year also missed its medium-term budgetary plan of paying 11.3% interest for previous borrowing, as it paid only around 8%, she said.
Consequently, money was taken from treasury reserves to compensate for the difference, she said, adding the government now plans to pay only 9.2% it will actually be required to pay 11.5% in fiscal 2026.
“What’s the point of setting this medium-term budgetary plan since you will never try to follow it?” asked the MP.
Chanin Rungtanakiat, spokesman for the House committee, responded to the opposition’s push to slash the 2026 budget by B50bn, urging them to focus less on arbitrary cuts and more on understanding why the government sees the proposed spending as necessary.