Bangkok: Deputy Prime Minister and Finance Minister Pichai Chunhavajira has underscored the critical need for structural economic reforms and increased private investment to address Thailand’s economic challenges. Despite his concerns about the current economic situation, Pichai remains confident in meeting revenue targets for the fiscal year 2025.

According to Thai News Agency, Pichai discussed the draft budget for fiscal year 2026, emphasizing his concerns as a citizen about the economy. He acknowledged the need to solve existing problems with the hope of improving lives, increasing spending, and reducing the wealth gap. Although the GDP growth target was adjusted from over 3% to 1.8%, Pichai expressed confidence in achieving the revenue goals and managing the treasury deficit.

Pichai highlighted a significant decline in private investment, which has fallen from 40% of GDP three decades ago to an average of 20% over the past decade. This decrease, along with the reduction of SMEs and supply chains, has led to fewer export opportunities and job losses. Particularly in the agricultural sector, Thailand’s exports are of low value, necessitating structural readiness and reforms. Pichai suggested leveraging government budgets and encouraging private sector investment in state enterprises and public-private partnerships (PPPs) to rejuvenate the economy.

Pichai further explained the necessity of a deficit budget, currently set at 850 billion baht for two fiscal years, or about 4%. After accounting for a principal repayment of 150 billion baht, the deficit would be approximately 700 billion baht, or about 3%. He likened Thailand’s economic situation to a developing child in Asia, requiring a deficit budget to transition into a growth economy. The debt to GDP ratio remains at an acceptable level, justifying the continued deficit.

Regarding the allocation of the 157 billion baht budget, Pichai indicated that exports might be impacted. Instead of directly injecting funds into consumer pockets, the government aims to resolve structural issues to boost domestic production. Despite time constraints, the budget preparation must proceed, and Pichai urged MPs to scrutinize and amend the 2016 budget, focusing on structural problem-solving. He also noted the need for behavioral changes in tourism to align with tourist expectations.