The cabinet has reallocated 157 billion baht ($4.7 billion) of budget spending away from a consumer stimulus scheme to fund projects in the coming months that will help Thailand counter the impact of US tariffs, the government said on Tuesday.
Thailand faces a 36% US tariff if a reduction cannot be negotiated with Washington before a moratorium expires in July. The United States has set a 10% tariff for most nations while the moratorium is in place.
The government will shift the 157 billion baht that had been allocated for next stages of its flagship "digital wallet" scheme to investment in water management, transport and logistics projects, and for soft loans for small businesses.
"The digital wallet has not been cancelled, but we need to review how to use this money to stimulate the economy as much as possible," Prime Minister Paetongtarn Shinawatra told reporters.
The draft budget bill for 2026, which was also approved by cabinet, will contain further support measures, she said.
The budget bill, which projects a 0.7% rise in spending to 3.78 trillion baht and a 1% drop in the deficit to 860 billion baht, will be debated in parliament later this month.
Deputy Finance Minister Julapun Amornvivat said projects using the 157 billion baht in available funding must be approved by September, as the tariffs will hit the economy in the second half of the year.
"We'll accelerate injecting the money in the third quarter because the third and fourth quarters are expected to be heavily affected by the tariff issue," he said.
Southeast Asia's second-largest economy grew by an annual 3.1% in the first quarter, but the state planning agency on Monday slashed its full-year growth forecast range by a percentage point to 1.3% to 2.3% because of the tariffs.
The economy expanded 2.5% last year, lagging peers.
Earlier on Tuesday, Finance Minister Pichai Chunhavajira said Thailand wanted a fair trading relationship with the United States.