The draft budget bill, which will be debated in the house over the next four days, projects a 0.7% rise in spending, and a 0.7% drop in the budget deficit to 860 billion baht, or 4.3% of gross domestic product, from the 2025 fiscal year that ends in September.
"A deficit budget policy is aimed at maintaining economic stability, including supporting a recovery and promoting growth at an appropriate level," the bill said.
The budget plan projects growth at 2.3% to 3.3% for both 2025 and 2026, with inflation predicted at 0.5% to 1.5%. The economy expanded 2.5% last year, lagging regional peers.
The plan did not take into account the potential impact of U.S. tariffs.
The budget is expected to pass, but comes amid tensions in the Pheu Thai Party-led coalition, particularly with its biggest partner, the Bhumjaithai Party. Disagreements have surfaced over the government's casino bill, which aims to legalise casinos within integrated complexes to boost tourism.
Rifts over constitutional reform and policy on the use and sale of cannabis, which was decriminalised in 2022 but is now facing tighter restrictions, have also strained the alliance.
If the budget does not pass, Paetongtarn, who came to power last year, could either step down and make way for a new premier elected by parliament, or dissolve the lower house and call a new general election.
Southeast Asia's second-largest economy expanded an annual 3.1% in the first quarter, but the state planning agency last week slashed its full-year growth forecast range by a percentage point to 1.3% to 2.3% because of the U.S. tariffs.
($1 = 32.740 baht)
