(Bloomberg) — Thailand’s lower house has backed a $102 billion budget for the next fiscal year that aims to boost state spending to boost growth in Southeast Asia’s second-largest economy.
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The 3.75 trillion baht ($102 billion) budget for the fiscal year starting Oct. 1 was backed by 311 lawmakers in the 500-member House of Representatives late Friday. A total of 175 lawmakers voted against and two abstained after a three-day debate in the first reading of the proposals, with the spending plan likely to be approved after two more readings.
Prime Minister Srettha Thavisin is increasing state spending for the second year in a row in a bid to push Thailand’s annual growth towards its 5% target. Southeast Asia’s second-largest economy has lagged behind its peers in the region, with an average growth rate of less than 2% over the past decade.
Part of the budget will be used for Srettha’s controversial cash handout program, which will give every Thai citizen aged 16 and over 10,000 baht. The Prime Minister expects the so-called digital wallet program to create a ‘whirlwind’ impact on the economy by boosting consumption and production.
Srettha’s cabinet also approved a supplementary budget of 122 billion baht for the current financial year to stimulate the economy. The governments plan to seek parliamentary approval for the additional spending in July.
The 2025 budget proposals include deficit financing of 866 billion baht, or 4.4% of gross domestic product, based on expected growth of 2.8% to 3.8% next year. According to the budget draft, headline inflation is estimated at 0.9%-1.9% this year and 1.1%-2.1% in 2025.
The budget plan is now sent to various committees for scrutiny. The House of Representatives will take up the bill for a second and third reading in August before sending it to the Senate for consideration and approval in early September.
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