Kiatnakin Phatra Securities (KKPS) wrote in a research note that the Thai Cabinet has approved an Emergency Decree allowing the Ministry of Finance to borrow up to THB 400 billion—about 2% of national GDP—to address the energy crisis and support the country’s energy transition. This move follows ongoing fiscal strain and rising living costs due to conflict in the Middle East, pushing this year’s fiscal deficit close to its ceiling.
According to KKPS, half of the borrowed funds will be directed toward relief programs, including subsidies for low-income households, farmers, and small businesses. This includes potential expansions of the “Half-Half Plus” subsidy and increased support for agricultural inputs like fertilizer.
The remaining funds will focus on long-term energy projects such as solar rooftop installations, EV charging stations, and upgrades to the electricity grid. All projects and supporting measures must be approved by September 30, 2026, with the first tranche expected to be spent within 3-6 months and the rest gradually disbursed over 6-18 months.
Despite reiterations of fiscal discipline, this additional borrowing could cause Thailand’s public debt to exceed its self-imposed ceiling of 70% of GDP by fiscal year 2027—one year earlier than previously targeted under the government’s Medium-term Fiscal Framework. This raises investor concerns regarding the government’s fiscal consolidation plans.
While the Emergency Decree becomes effective once published in the Royal Gazette, it requires parliamentary approval by 14 May to remain valid. Legal challenges may arise, especially since part of the loan is allocated to long-term energy transition investments, which may not meet the immediate criteria for emergency spending.
