The issue of the 400 billion baht borrowing decree continues to be widely discussed because this large amount will become a "debt cost" that the entire nation must bear over the long term. Although the current government emphasizes that this borrowing is crucial to stimulate the economy, why does the National Economic and Social Development Council (NESDC) still project Thailand's GDP growth for 2026 at only 1.5–2.5% despite the 400 billion baht borrowing?
Amid the gloomy sentiment that Thailand's economy remains sluggish, the government has chosen to issue a decree to borrow 400 billion baht to tackle the energy crisis. The borrowed funds will be roughly equally divided between two main objectives:
1. Reducing living costs caused by rising energy prices. One well-known project, often referred to as a cash handout, is the 'Thai Help Thai Plus' program, which targets recipients with 1,000 baht per person for four months, including beneficiaries of the State Welfare Card.
2. Investing in transforming Thailand’s energy system in line with global trends by promoting renewable and alternative energy, such as installing solar panels on homes and electric vehicles (EVs). There have been discussions about allocating funds to allow citizens to install solar panels at low interest rates, for example.
Many parties question why the government must urgently borrow 400 billion baht via this decree, since the transition and restructuring of Thailand's energy system could potentially be accelerated through other processes. Therefore, it remains to be seen what obstacles the funds for the second objective will encounter or whether the government will provide further clarification or adjustments to its plans.
Many compare the 400 billion baht borrowing decree to temporarily using a credit card with the risk of ballooning debt, as it could automatically push the public debt-to-GDP ratio beyond the 70% threshold.
A key question is whether the 400 billion baht borrowing is worthwhile. The Economic and Business Research Center (SCB EIC) views that this borrowing, especially the cost-of-living support measures, will boost Thailand’s economy in 2026 by 0.7 percentage points. However, when these short-term government measures expire this year, economic growth in 2027 is expected to slow by 0.4 percentage points compared to previous estimates, with a risk that public debt will exceed the 70% ceiling in 2027 as well.
Meanwhile, the energy transition plan is not expected to have a significant short-term impact but is hoped to reduce fiscal vulnerability over the long term, potentially increasing Thailand's GDP by 0.1–0.2% compared to the scenario without additional borrowing.
The borrowing will be worthwhile if the government achieves four key outcomes:
1) Allocating funds accurately, ensuring transparency and clear monitoring.
2) Attracting private sector co-investment, such as through public-private partnerships (PPP).
3) Reducing dependence on imported energy by building domestic production capacity and economic benefits within the country.
4) Reforming renewable energy beyond short-term projects to establish a centralized electricity trading system and transition to a truly free market over the long term.
Recently, the overall economic picture for Q1 2026 was summarized by Danucha Pichayanan, Secretary-General of the National Economic and Social Development Council (NESDC). She reported that Thailand’s GDP grew by 2.8% this quarter, accelerating from approximately 2.5% in Q4 2025 (seasonally adjusted growth was 0.7% quarter-on-quarter).
For 2026, the GDP growth target remains at 1.5–2.5% (with a midpoint of 2.0%), including the effects of the Middle East conflict and the 400 billion baht borrowing. The year is expected to be supported by three key factors:
1) Continued growth in private consumption (+2.4%) and private investment (+3.7%).
2) Positive results from government budget frameworks covering both regular and investment expenditures, along with the 400 billion baht borrowing decree.
3) Continued export growth, with export value in US dollars projected to increase by 9.6%.
Inflation is expected to average between 2.0% and 3.0%, and the current account balance is forecasted to have a surplus exceeding 1.0% of GDP.
Regarding the 400 billion baht borrowing decree, disbursements are expected to total 170–200 billion baht in 2026, with the remainder occurring in 2027. Preliminary calculations indicate that public debt will not exceed the 70% debt ceiling.
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