Borrowing for fiscal 2026 set at B1.2tn

The government plans new borrowing totalling 1.2 trillion baht for fiscal 2026, a slight decrease from 1.22 trillion in fiscal 2025.

According to a Finance Ministry source who requested anonymity, the government and state-owned enterprises' new borrowing plan of 1.2 trillion baht is divided into six parts.

First, borrowing to compensate for the budget deficit, amounting to 860 billion baht, in accordance with the Public Debt Management Act. Under this act, borrowing may not exceed 20% of total budget expenditures for that fiscal year, plus up to 80% of expenditures earmarked for debt principal repayment.

Second, carrying over government borrowing from fiscal 2025 that has not been executed. The government requested an extension of the borrowing period, allowing 80 billion baht to be carried over and borrowed in fiscal 2026.

Third, borrowing under Section 22 of the Public Debt Management Act for economic and social development purposes. This borrowing is excluded from the regular annual budget and is for the Public Health Ministry and the Department of Rural Roads, totalling 11.4 billion baht.

Fourth, government borrowing for relending to state agencies totalling 51.6 billion baht, with 36.3 billion for the State Railway of Thailand and 15.2 billion for the Mass Rapid Transit Authority of Thailand.

Fifth, borrowing of 113 billion baht to manage the treasury balance's liquidity.

Sixth, new domestic borrowing by 16 state-owned enterprises in fiscal 2026, totalling 89.9 billion baht.

To manage existing government debt, through refinancing or rollover, the government plans to manage 1.88 trillion baht in fiscal 2026 to reduce costs and maintain fiscal stability.

Regarding the government debt repayment plan in 2026, the government and state-owned enterprises plan to repay a total of 503 billion baht (including principal and interest).

As of August, the government's total public debt is 12.16 trillion baht, equivalent to 64.6% of GDP, while the government's debt ceiling is set at 70% of GDP. The public debt burden surged following the pandemic in 2020-2021, attributed to special borrowing laws to mitigate the economic impact.

Total borrowing reached as high as 1.5 trillion baht, causing the public debt level to rise rapidly and exceed the public debt ceiling at the time, which was capped at 60%. As a result, the Gen Prayut Chan-o-cha administration raised the ceiling to 70%.

The sharp increase in public debt prompted Moody's and Fitch to express concern over Thailand's debt-servicing capacity, as they saw limited potential for economic growth and ongoing political instability. Both agencies revised the government's credit rating outlook from stable to negative.

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