Thailand's Fiscal Deficit for FY2026 Falls to 3.4% of GDP

Key summary

Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas stated that Thailand's fiscal deficit for fiscal year 2026 was 3.4% of gross domestic product, down from the earlier forecast of 4.4%. The Deputy Prime Minister attributed the improvement to stronger-than-expected government revenue, noting that value-added tax (VAT) collections were significantly above target due to higher goods prices. While the exact total revenue figures are pending release, Ekniti indicated that the deficit reduction supports fiscal stability and has strengthened Thailand's bond market. Comparing 10-year government bond yields, he noted Thailand at approximately 2.3–2.4%, compared to about 5.2% in the United States and nearly 5% in France. Although a warning from the Office of the National Economic and Social Development Council suggested public debt could exceed fiscal framework limits in 2028, Ekniti argued that revenue performance has improved the country's position. The government is considering a VAT rate increase in Parliament subject to fiscal discipline principles. A comprehensive review of the medium-term fiscal plan is underway, with consideration expected in November 2026. Ekniti expects the deficit to reach 3% of GDP sooner than the original medium-term plan timeline, which targeted this level by fiscal 2029.