Bangkok: The National Economic and Social Development Council (NESDC) acknowledged significant limitations in preparing the 2027 budget, citing soaring recurring expenses and debt repayments as factors encroaching on investment spending. This has resulted in an overall 7% decrease in investment spending compared to the previous year. However, the NESDC reiterated its commitment to maintaining a minimum investment allocation of 20%, adhering to legal requirements.
According to Thai News Agency, Mr. Danucha Pichayanant, Secretary-General of the NESDC, revealed the guidelines for managing the government budget and financial plan in 2027. He stated that budget preparation for 2027 faces limitations due to the majority of the budget being allocated to recurring expenses, as well as allocations to replenish the treasury reserves and pay outstanding debts. However, investment allocation remains in line with the legal requirement of at least 20% of the total expenditure budget. Although the overall investment budget has decreased by approximately 7% compared to last year, over 200 billion baht in investment from state enterprises will help support it.
Furthermore, the government has allocated a central budget to support emergencies and necessities, such as managing droughts and floods, as well as preparing approximately 10 billion baht to mitigate the impacts of the energy situation and conflicts in the Middle East. If this budget is used for investment projects, it can help increase the overall investment budget later on. In addition, emphasis is placed on integrated budget allocations for water management, with a total of 18 billion baht allocated this year to address water management issues sustainably.
'Although the allocation of investment funds this year has decreased, it remains within the legal framework of the budget law, which stipulates that it must not be less than 20% of the total budget. The government can accelerate overall investment by urging state enterprises with investment projects to proceed with their plans, totaling over 200 billion baht. In addition, the contingency fund set aside for emergencies and necessary projects can be used to support investment. We are confident that the government still has sufficient funds to inject into the economy to achieve the planned economic growth.'
When asked about Deputy Prime Minister and Minister of Finance, Mr. Ekniti Nitithanpraphas,'s announcement to reduce the budget deficit to 3% of GDP by 2029, and how the government must proceed to achieve this target, Mr. Danucha stated that the target is part of the country's medium-term fiscal plan. It is necessary to proceed according to the plan to build investor confidence. The feasibility of achieving this target depends on economic growth. If the economy expands well driven by private sector investment and the influx of new industries into Thailand, it will facilitate financial management and deficit reduction, as GDP will grow more. Private sector investment is therefore essential as the driving force.
The Secretary-General of the NESDC also addressed the structural problems of the overall annual budget, stating that current recurring expenditures, particularly welfare and personnel costs, constitute a very high and continuously expanding proportion of the budget. This has a negative impact on and encroaches upon the investment budget. Therefore, in the future, it is necessary to consider improving the welfare system, such as the health insurance system, in order to reduce this burden on the budget and create more room for investment in national development.
When asked about the budget allocation to provinces and provincial clusters at the regional level, which has decreased to approximately 4.2 billion baht this fiscal year from approximately 26 billion baht previously, Mr. Danucha stated that the government has a policy to adjust provincial budget spending, focusing primarily on job creation and tourism promotion. This is to reduce duplication with infrastructure projects of central government agencies. A budget ceiling of no more than 20% of the original limit has been set to ensure flexible and efficient budget management within the limited budget.