November 24, 2025
BANGKOK – Thailand’s Medium-Term Fiscal Framework (MTFF) for 2026–2030, recently approved by the Cabinet, will serve as the foundation for the 2027 budget, set at 3.788 trillion baht and planned as a deficit budget of 788 billion baht.
The new MTFF replaces the previous version and aims to strengthen fiscal stability, narrow the deficit and manage public debt at a time when the economy continues to face significant challenges and public debt remains close to the legally mandated ceiling of 70% of GDP.
The updated framework maintains the government’s approach of running deficit budgets and acknowledges that Thailand’s public debt will remain at a high level—close to the 70% threshold—over the next five fiscal years.
A review of the latest MTFF document approved by the Cabinet shows the following projections:
Five-year budget framework (2026–2030)
1. Fiscal Year 2026
• Expenditure: 3.7806 trillion baht
• Deficit: 860 billion baht
• Fiscal deficit: 4.4% of GDP
• Public debt: 68.17% of GDP
2. Fiscal Year 2027
• Expenditure: 3.788 trillion baht
• Deficit: 780 billion baht
• Fiscal deficit: 3.9% of GDP
• Public debt: 69.36% of GDP
3. Fiscal Year 2028
• Expenditure: 3.826 trillion baht
• Deficit: 681 billion baht
• Fiscal deficit: 3.3% of GDP
• Public debt: 69.78% of GDP
4. Fiscal Year 2029
• Expenditure: 3.864 trillion baht
• Deficit: 590 billion baht
• Fiscal deficit: 3.0% of GDP
• Public debt: 69.52% of GDP
5. Fiscal Year 2030
• Expenditure: 3.903 trillion baht
• Deficit: 481 billion baht
• Fiscal deficit: 2.1% of GDP
• Public debt: 68.22% of GDP
Finance Minister highlights tighter fiscal discipline under “Quick Big Win”
Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas said the MTFF is a core component of the government’s Quick Big Win economic agenda and is designed to reinforce fiscal discipline. Economic agencies have agreed on stricter fiscal rules, such as capping the central budget at no more than 3% of total expenditure, compared with a previously more flexible range.
Deficit to be reduced to 3% of GDP by 2029
Ekniti stated that the government aims to cut the deficit to no more than 3% of GDP by FY2029, improving from the current 4.4% level. He reaffirmed that public debt will remain within the fiscal sustainability framework, capped at 70% of GDP.
Debt-service budgeting will also be tightened, with debt repayments required to be at least 4% of total expenditure, while multi-year commitments will be capped at no more than 5% per fiscal year.
Stricter oversight of quasi-fiscal activities (Section 28)
To address long-standing concerns over the use of quasi-fiscal instruments under Section 28 of the Fiscal Responsibility Act, the government will implement a more transparent approval process. The Cabinet has instructed the Fiscal Policy Committee, the Budget Bureau director and the Permanent Secretary for Finance to draw up clearer guidelines.
This will supplement the existing rule that Section 28 commitments must not exceed 32% of recurrent expenditure, and must receive final approval from the Prime Minister before submission to the Cabinet. The aim is to avoid non-productive spending that does not enhance agricultural productivity or economic capacity.
Revenue enhancements and spending cuts planned
The Ministry of Finance and the Budget Bureau have been tasked with restructuring revenue and expenditure.
The medium-term revenue target is set at no less than 15.1% of GDP, up from the current 14.8%, while government expenditure is planned to fall to 18% of GDP, down from roughly 19%.
Government prioritises investment without increasing public debt
Despite tighter fiscal conditions and reduced central budgets, the government emphasises the need for continuous public investment. It will utilise alternative financing mechanisms that do not add to public debt, including:
• The Thailand Future Fund (TFF)
• Other infrastructure funds
• Public–private partnerships (PPP)
These channels will help expand the country’s investment capacity without breaching the public debt ceiling.
Proactive debt-management proposals unveiled
A government source revealed that the State Monetary and Fiscal Policy Committee has submitted recommendations to the Cabinet on public-debt management under the new fiscal framework. Key directions include:
- Active debt management, with funding strategies aligned to domestic and global economic conditions. This includes forward-looking assessments to minimise risks stemming from interest-rate volatility and opportunities to restructure government debt.
- Maintaining strict repayment discipline, ensuring adequate allocations for both principal and interest payments. Interest-payment budgets should remain flexible enough to accommodate shifts in global interest-rate movements.
- Assessing debt-servicing capacity, using interest-payment burdens relative to projected annual revenue. The interest-to-revenue ratio at the end of FY2025 stands at 10.2%, still within a safe range despite rising borrowing needs in recent years.
The committee also proposed updating fiscal rules under Section 11(4), including guidelines for the central fund, emergency reserves, debt-repayment budgets and multi-year commitments — aimed at signalling the state’s intention to reinforce fiscal discipline.
Clearer rules for approving Section 28 projects
To strengthen oversight of quasi-fiscal commitments, the committee recommends that all Section 28 projects remain within the 32% ceiling and that agencies avoid grant-style programmes that fail to improve agricultural or economic productivity.
For each proposal:
- The project-owning agency must first obtain the Prime Minister’s approval,
- The Ministry of Finance must provide an assessment and written opinion,
- Before the proposal is submitted to the Cabinet for final approval.
Goal: reduce fiscal deficit to below 3% by FY2030
These combined measures — proactive debt management, stricter fiscal rules and tighter Section 28 controls — aim to bring Thailand’s fiscal deficit down to no more than 3% of GDP by FY2030.
This target is designed to expand fiscal space, rebuild fiscal resilience and restore long-term sustainability to public finances.