The Thai government has reallocated 157 billion baht (US$4.7 billion) from its flagship digital wallet scheme to fund infrastructure and small business support, as the country braces for potential economic fallout from rising US tariffs.
The shift in budget spending was approved by the cabinet on Tuesday, with officials citing the urgency of preparing for a possible 36% tariff on Thai exports to the United States.
The elevated tariff could take effect if negotiations with Washington fail before the current moratorium expires in July. Under the moratorium, most nations are currently subject to a 10% tariff.
The funds will now be directed toward key investment areas including water management, transportation and logistics, and soft loans for small- and medium-sized enterprises (SMEs).
“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 said during a press briefing.
The cabinet also approved the draft budget bill for fiscal year 2026, which includes additional stimulus measures.
The proposed budget outlines a 0.7% increase in government spending to 3.78 trillion baht, while projecting a 1% reduction in the fiscal deficit to 860 billion baht. The bill will be presented to parliament for debate later this month.
Deputy Finance Minister Julapun Amornvivat emphasized the urgency of deploying the 157 billion baht in redirected funds, stating that projects must be approved by September to counteract the expected economic strain in the latter 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,” Julapun said.
Thailand’s economy grew 3.1% year-on-year in the first quarter of 2025. However, the state planning agency on Monday cut its full-year growth forecast by one percentage point, now projecting growth between 1.3% and 2.3%, citing the likely impact of the US trade measures.
In 2024, the economy expanded 2.5%, trailing behind other nations in the region.
Speaking earlier on Tuesday, Finance Minister Pichai Chunhavajira said Thailand seeks a fair and equitable trading relationship with the United States.
