Thailand to borrow $12.2 bn as Mideast crisis bites

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Bangkok: The Thai government has taken a decisive fiscal step by approving a $12.2 billion emergency borrowing package to buffer the domestic economy from the widening fallout of the Middle East conflict. 

This massive 400-billion-baht loan serves as a strategic shield against a ‘perfect storm’ of economic pressures, including soaring global energy costs, disrupted shipping lanes, and a sharp slowdown in national growth.

With the Finance Ministry recently slashing its GDP growth forecast for 2026 to just 1.6 percent, the package is viewed by the cabinet as a vital instrument to prevent a deeper recession.

A primary focus of the expenditure is the protection of Thailand’s most vulnerable populations through the ‘Thais Helps Thais’ scheme.

Scheduled for deployment between June and September, the funding will provide direct aid to over 20 million low-income individuals who are currently struggling with the rapid inflation of essential goods. 

Beyond immediate relief, the government is also allocating resources toward alternative energy development. This long-term investment aims to diversify Thailand's energy portfolio, reducing the nation’s susceptibility to the volatile oil and gas price spikes currently roiling international markets.

Despite the scale of the borrowing, one of the largest in decades, government officials have emphasized that the move remains within the bounds of fiscal responsibility. While core inflation is now projected to hit 3.0 percent, a significant increase from previous estimates, the national public debt remains below the 70 percent ceiling mandated by law. 

Prime Minister Anutin Charnvirakul has framed the loan not merely as a debt, but as an essential tool to move the country forward, signaling a commitment to maintaining economic momentum despite the external shocks caused by the US-Israel-Iran conflict.