The cabinet has approved a budget of 3.78 trillion baht for the 2026 fiscal year, as well as soft loans to help small businesses, officials said on Tuesday.
The proposed budget will have a deficit of 860 billion baht and aims to stimulate the economy, Deputy Finance Minister Julapun Amornvivat told reporters.
Last month, the government said it projected a 0.7% rise in spending and a 1% drop in the deficit for the 2026 fiscal year that starts on Oct 1, 2025.
Mr Julapun said the Ministry of Finance would look at revenue collection while the Bank of Thailand must seek measures to bring headline inflation to 2%, the midpoint of the target range of 1% to 3%.
Annual headline inflation was 1.2% in December, returning to the target range for the first time in seven months. Inflation averaged just 0.4% in 2024.
Low inflation throughout 2024 led the government to press the Bank of Thailand to cut interest rates to stimulate more economic activity. The central bank finally cut its benchmark rate to 2.25% in October, but left it unchanged at its next meeting in December.
The central bank must also ensure that the baht — currently trading around 34.50 to the US dollar — is competitive, Mr Julapun said.
“The BoT must ensure the exchange rate is at an appropriate level, allowing Thai businesses to compete with their partners and competitors,” he added, without specifying a level.
Separately, Deputy Finance Minister Paopoom Rojanasakul said the cabinet had approved 20 billion baht worth of soft loans to support smaller and medium-sized businesses lacking access to credit.
The loans offer an interest rate of 3% for three years, he said in a statement.
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