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25 Dec 2025

Econ Digest

Thailand’s Fiscal Risks: Lessons Learned from Other Countries and Implications for Thailand

คะแนนเฉลี่ย
  • Thailand’s fiscal position is weaker than that of other countries with the same credit rating (BBB+ / Baa1), due to rapidly rising public debt and persistent fiscal deficits. If nominal GDP grows by only 3% per year, the fiscal deficit could exceed 4% of GDP, and public debt could reach 70% by 2027, increasing the risk of a future credit rating downgrade.
  • The Medium-Term Fiscal Framework (2027–2030) aims to reduce the fiscal deficit to 3% of GDP by 2029, which is a positive signal. However, risks remain due to potentially overly optimistic GDP growth assumptions and uncertainties regarding the consistent implementation of fiscal policies.
  • Even if Thailand were downgraded, the country would not face an immediate risk of a fiscal crisis, as it would remain within investment grade—two notches above non investment grade. However, a downgrade would negatively impact borrowing costs and Thailand’s attractiveness to investors.​
  • Lessons from Italy show that substantial deficit reduction—through stronger revenue measures, expenditure discipline, and improved public sector efficiency—can help avoid a credit rating downgrade. Thailand can adopt similar approaches but should expand the scope of measures, such as broadening the tax base, establishing legally binding fiscal rules, strengthening budget oversight mechanisms, and implementing public sector reforms.

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