AMROCountryReportACR/25-11

AMROAnnualConsultation

Report

Thailand–2025

ASEAN+3MacroeconomicResearchOffice(AMRO)

December2025

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Acknowledgments

1.ThisAnnualConsultationReportonThailandhasbeenpreparedinaccordancewiththefunctionsofAMROtomonitorandassessthemacroeconomicstatusandfinancialsoundnessofitsmembers;identifyrelevantrisksandvulnerabilities;reportthesetomemberauthorities;andifrequested,assisttheminmitigatingtheserisksthroughthetimelyformulationofpolicyrecommendations.ThisisbeingdoneinaccordancewithArticle3(a)and(b)oftheAMROAgreement.

2.ThisReportisdraftedonthebasisoftheAnnualConsultationVisitofAMROtoThailandfromAugust18toAugust29,2025(Article5(b)oftheAMROAgreement).TheAMROMissionteamwasledbyAllenNg(GroupHeadandMissionChief)andjoinedbyHaobinWang(DeskEconomist),BenyapornChantana(Back-upEconomist),RavisaraHataiseree(FiscalSpecialist),XianguoHuang(SeniorEconomist)andYuhongWu(ResearchAnalyst).AMRODirectorMr.YasutoWatanabeandChiefEconomistDr.DongHeparticipatedinkeypolicymeetingsandcourtesycallswiththeauthorities.TheAMROAnnualConsultationReportonThailandfor2025waspeerreviewedbyagroupofeconomistsfromAMRO’sCountrySurveillance,FinancialSurveillance,andFiscalSurveillanceteams;endorsedbythePolicyandReviewGroup;andapprovedbyDr.DongHe,AMROChiefEconomist.

3.TheanalysisinthisReportisbasedoninformationavailableuptoNovember17,2025.

4.Bymakinganydesignationoforreferencetoaparticularterritoryorgeographicalarea,orbyusingtheterm“member”or“country”inthisReport,AMROdoesnotintendtomakeanyjudgmentsastothelegalorotherstatusofanyterritoryorarea.

5.OnbehalfofAMRO,theMissionteamwishestothanktheThaiauthoritiesfortheircommentsonthisReport,aswellastheirexcellentmeetingarrangementsandhospitalityduringourvisit.

Disclaimer:Thefindings,interpretationsandconclusionexpressedinthisReportrepresenttheviewsofthestaffofASEAN+3MacroeconomicResearchOffice(AMRO)andarenotnecessarilythoseofitsmembers.NeitherAMROnoritsmembersshallbeheldresponsibleforanyconsequencefromtheuseoftheinformationcontainedherein.

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TableofContents

Acknowledgments 1

TableofContents 2

ExecutiveSummary 3

BackgroundContext 5

A.RecentDevelopmentsandOutlook 6

A.1RealSectorDevelopmentandOutlook 6

A.2ExternalSector 8

A.3FiscalSector 10

A.4MonetaryConditionsandFinancialSector 11

B.Risks,Vulnerabilities,andChallenges 13

B.1Short-termRisks 13

B.2Medium-toLong-termrisks 14

C.PolicyDiscussionandRecommendations 16

BoxA.Revampingofthecreditguaranteescheme 18

BoxB.Thailand’sCapitalExpenditureDisbursementDelay–AnAssessment 22

BoxC.MaximizingFDISpilloversforThailand'sStructuralTransformation 26

Appendices 29

Appendix1.SelectedFiguresforMajorEconomicIndicators 29

Appendix2.SelectedEconomicIndicatorsforThailand 33

Appendix3.Medium-termProjectionsforKeyEconomicIndicators 34

Appendix4.BalanceofPayments 35

Appendix5.StatementofGeneralGovernmentOperations 35

Appendix6.MonetarySurvey 36

Appendix7.ClimateClipboard—Risks,Responses,andOpportunities 37

Annexes:SelectedIssues 42

1.MonetaryPolicyunderHighUncertainty:AScenario-BasedApproachforThailand 42

2.DebtSustainabilityAnalysis 50

3.Thailand’sAutomotiveSectorataCrossroads:ManagingtheTransitiontoEVs 56

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ExecutiveSummary

1.RecentgrowthintheThaieconomyremainedsubdued,weigheddownbyweaknessindomesticdemand.GDPgrewby2.5percentin2024,asprivateconsumptionslowedsharplyandprivateinvestmentcontractedamidsluggishincomegrowthandfragilesentiment.Thesetrendspersistedinto2025,withprivateconsumptionrisingby2.6percentinthefirstthreequarters,downfromnearly7percentin2023.Thisfollowsanoverallsluggishpost-pandemicrecovery,whichhasbeenrepeatedlyinterruptedbyaseriesofexternalanddomesticshocks,leavingThailand’sgrowthtrajectorywellbelowitspre-pandemictrendandregionalpeers.

2.However,somepositivedevelopmentsareemerging.Aftercontractingforseveralconsecutivequarters,privateinvestmentreboundedinQ2andQ32025amidasurgeinforeigndirectinvestment(FDI)commitments.Increasinginvestmentsinhigh-valuesectors—includingelectricvehicles(EVs),electronics,anddatacenters—offerpathwaystomoreresilientgrowth.Overall,Thailand’sGDPgrewby2.4percentinthefirstthreequartersof2025,supportedbyareboundinpublicspendingandfront-loadedexportsaheadofUStariffs.

3.Lookingahead,growthisprojectedtomoderateintheneartermbutimproveinthemediumterm.Growthisprojectedtoslowto2.2percentfortheyearand1.9percentin2026,reflectingtheunwindingoffront-loadedexportsandpersistentprivatesectorweakness.However,medium-termgrowthisexpectedtograduallyimprove,supportedbymoreinvestment-focusedfiscalspendingandincreasingFDIinEVs,electronics,anddatacenters.

4.Inflationisexpectedtoremainlow.Headlineinflationaveraged0.4percentin2024andturnednegativeinQ2andQ32025,mainlyreflectingsupply-sidefactorssuchaslowerenergypricesamidweakdomesticdemand.Inflationisexpectedtoremainbelowtarget,at0.5percentand0.8percentin2025and2026.Intheabsenceofsignificantsupply-sideshocks,inflationexpectationsareexpectedtoremainwellanchoredwithintheBankofThailand’sinflationtargetrangeof1to3percentgoingforward.

5.Externalpositionhasremainedresilient,butcapitaloutflowspersist.Thecurrentaccountsurpluswidenedto2.1percentofGDPin2024and3.6percentinthefirstthreequartersof2025,drivenbystronggoodsexportandrecoveringtourismreceipts,butthepaceoftourismrecoverywasweakerthanexpectedduetoasharpdeclineinthenumberofChinesetourists.Thebahtappreciatedinrealeffectivetermsamidrecord-highreservesandstrongFDIinflows,butportfoliooutflowspersistedasThairesidentscontinuedseekingoverseasinvestmentopportunities.

6.Fiscaldeficitremainselevated,pushingpublicdebthigher.Fiscaldeficitisexpectedtowidento4.5percentofGDPinFY2025,aspublicexpenditurerisesto19.6percentofGDPamidcontinuedstimulusmeasures,whilerevenueremainsstableat15.1percentofGDP.Asaresultofsustainedfiscalexpansionandsubduedgrowth,publicdebtisexpectedtoriseto65.6percentofGDPinFY2025,andtopeakatslightlyabove69percentin2028.

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7.Creditgrowthhasremainedsubduedreflectingboththeweakdemandforloanandamorecautiouslendingapproachamidasloweconomicrecovery.Overallbankcreditcontractedin1H2025,ledbydeclinesinSMEandconsumerloans.Assetqualitydeterioratedmodestly,withSMENPLsrising.However,banksremainwell-capitalizedandprofitablewithstrongbuffers.

8.Risksaretiltedtothedownside.ExternalrisksincludetheescalationofUSprotectionistmeasuresandacontinuedshortfallintouristarrivals.Domestically,thekeyriskisaself-reinforcingdownturnindomesticdemanddrivenbyweakincome,tightcredit,andpoliticaluncertainty.UpsidepotentialexistsifsurgingFDIcommitmentscouldtranslateintostrongersustainedinvestmentactivities.

9.Inthenearterm,theimmediatepriorityistopreventaself-reinforcingdownturnindomesticdemandthroughcontinuedmacroeconomicpolicysupport.

?Monetarypolicyshouldremainsupportiveamidweakeningprivatesectormomentumandmountinguncertainty.Thecurrentaccommodativestanceisappropriate,withscopetoeasefurtherifdomesticdemandprovesweakerormorepersistent.TheBankofThailand(BOT)’semphasisonthetimingandeffectivenessofpolicyadjustmentiswell-supported,giventheelevateduncertaintyinbothdomesticandexternaloutlooks.

?Financialpolicyshouldstrikeabalancebetweenmanaginglegacydebtvulnerabilitiesandsupportingnewproductivecredit.Whilefinancialconditionshavebroadlystabilized,manyhouseholdsandSMEsstillfacedebtservicingchallenges.Continuedeffortstorestructureorrescheduledistressedloansarecriticaltoreducedebtoverhang.

?Fiscalpolicyshouldremainsupportiveinthenearterm,especiallyforvulnerablegroups,particularlyifdomesticdemandweaknesspersists.Therecentshiftofthedigitalwalletschemetowardinfrastructureandproductivity-enhancinginvestmentsiswelcomeandshouldbeimplementedswiftlytosupportnear-termgrowthandlong-termcompetitiveness.Overthemediumterm,fiscalconsolidationeffortsshouldcontinuetorebuildfiscalspaceamidgrowingdemandsonpublic

resources.

10.Overthelongerterm,structuralpolicyshouldbeanchoredonrevitalizingdomestictransformationtoliftThailand'spotentialgrowth,underpinnedbystrongerexecutionofreformsininnovation,humancapital,andinfrastructure.CentraltothisisharnessingFDIasacatalystforworkforceupskilling,technologytransfer,andstrongerdomesticlinkages,includinginsecondarycities.Thisapproachcoulddelivermoreinclusive,regionallybalancedgrowthwhileupgradingThailand'sexistingindustrialandservicesectorstrengths—particularlyinautomotive,electronics,anddigitalservices—andenhancingThailand'soverallglobalcompetitiveness.

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BackgroundContext

ADelayedandDisruptedPost-PandemicRecovery

1.Thailand’spost-pandemicrecoveryhasbeenamongtheweakestintheregion,weigheddownbyaseriesofcompoundingshocks.RealGDPexpandedbyjust2percentannuallybetween2021and2024—wellbelowtheASEAN+3averageofover4percent.Asof2024,realoutputisonly2.4percentabovepre-pandemic(2019)levels,whiletheregionalaveragehasalreadysurpassed10percent.Thailand’spotentialgrowthhasalsodeclined—fromabove3percentpre-COVIDtoanestimated2.5percentatpresent—asthepandemicandtheshockssincehaslikelyledtoadownwardshiftinitstrendgrowth

1

.ThisprolongedunderperformancereflectsasequenceofdomesticandexternalsetbacksthathaverepeatedlyderailedThailand’srecoverymomentum.

2.ThefirstwaveofshocksstemmedfromtheCOVID-19pandemic.Likemanyofitspeers,Thailandsufferedasharpcontractionin2020.However,theeconomywashitharderthanmostduetoitsheavyrelianceontourismreceipts,whichaccountedforover10percentofGDPbeforethepandemic

2

.Moreimportantly,whileotherregionaleconomiesbeganrecoveringin2022–2023,Thailand’sreboundlaggedasChina—itslargestsourceofinboundtourists—maintainedstrictbordercontrolslongerthanothers.ThisprolongedabsenceofChinesetouristsextendedthedragonThailand’stourismsectorwellbeyondtheinitialphaseofthepandemic.

3.Evenasbordersreopenedandprivatesectoractivitybegantopickup,domesticpoliticaluncertaintycreatedrenewedheadwinds.Intheaftermathofthepandemic,Thailandexperiencedastrongreboundinprivateconsumptionandinvestment,supportedbypent-updemandandreopeningmomentum.However,recurringdelaysinbudgetapprovals—particularlyduringthepoliticaltransitionin2023—constrainedfiscaldisbursementsandpublicinvestment.Publicconsumptionandcapitalspendingremainedweak,offsettingprivatesectorgainsandresultinginanunevenrecovery.Meanwhile,somelocalmanufacturerswerelosingmarketshareandprofitabilityamidrisingimportsoffurniture,textiles,apparel,andsmallelectricalappliances.

4.Bymid-2024,publicinvestmentfinallybegantoreboundfollowingtheapprovaloftheFY2024budget,yetnewheadwindsquicklyemerged.Privateconsumptionbegantolosemomentumamidsluggishincomegrowth,tightcreditconditions,andstill-elevatedhouseholddebt.Investmentalsoweakened,particularlyintheautomotivesector.Atthesametime,sweepingUStariffsonThaiexports,alongsiderenewedpoliticaluncertainty,furtherdampenedinvestorconfidenceandexternaldemand.Theserecentshocks—exploredinthenextsection—highlightthatThailand’srecoveryremainsprecariousdespiterecentimprovementsinpublicspending.

1ThedeclineinpotentialgrowthreflectsaprolongeddownshiftinThailand’strendgrowthfollowingthepandemic,drivenbyasequenceofcompoundingshocksandtheoveralldeclineininvestmentgrowth.Foramorein-depthanalysis,pleaserefertotheSelectedIssuespaper,“Thailand'sLong-TermGrowthPotential:TheCaseforReform,”inAMRO’s2024AnnualConsultationReportonThailand.

2TourismreceiptsasashareofGDPwasabout11.8percentin2019.

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A.RecentDevelopmentsandOutlook

A.1RealSectorDevelopmentandOutlook

PrivateSectorWeaknessOffsetsPublicSectorReboundandExternalResilience,butPositiveSignsAreEmerging

1.Thailand’sgrowthperformancein2024andthefirsthalfof2025wasmarkedbyadivergencebetweenpublicandprivatesectordynamics.Privatesectordemandsoftened,withprivateconsumptiongrowthslowingfrom6.9percentin2023to4.4percentin2024,andfurtherto2.6percentinthefirstthreequartersof2025(Figure1).Theslowdowninconsumptionwasbroad-based,affectingdurablegoods,services,andsemi-durablespendingamidsluggishincomerecovery.Consumerconfidencealsodeclined,asshowninrecentsurveys

3

,addingtohouseholdcautionamideconomicandjobmarketconcerns.Privateinvestmentwasweak—contractingby1.6percentin2024and0.9percentinQ12025—mainlyduetodeclinesinrealestateandtraditionalautomanufacturing.However,privateinvestmentpostedastrong

4.1and4.2percentreboundinQ2andQ32025—drivenbyarecoveryinautomotiveinvestmentandrobustgrowthinmachineryandequipment—suggestingthatthetranslationofongoingFDIinflowsintoprivateinvestmentmaybegainingmomentum(Figure2and3).

2.Areboundinpublicspendingandresilientexportgrowthhavecushionedtheprivatesectorslowdown.FollowingthedelayedapprovaloftheFY2024budget,publicinvestmentimproved—risingby4.8percentin2024andby7.7percentyear-on-yearinthefirstthreequartersof2025—helpingtooffsetsoftprivatesectordemand.Goodsexportsgrewby5.9percentin2024amidacontinuedglobaltradeupcycleandby13.8percentinthefirstthreequartersof2025,drivenbyrobustelectronicsexportsandfront-loadedshipmentsaheadofanticipatedUSreciprocaltariffs.Asaresult,Thailand’sGDPregistered2.5percentgrowthin2024and2.4percentinthefirstthreequartersof2025.

3.Ontheproductionside,growthin2024andthefirstthreequartersof2025wasdrivenbyservices,whilemanufacturingremainedweak.Theservicessectorremainedthemostconsistentgrowthengine,expandingby3.9percentin2024and

3.3percentinthefirstthreequartersof2025,supportedbygrowthinwholesaleandretailtrade,accommodationandfoodservices,andtransportactivities.However,growthoftheaccommodationandfoodservicessub-sectordeclinedfrom9.6percentin2024to3.3percentinthefirstthreequartersof2025,amidtheslowdownintouristarrivals.Agriculturaloutputcontractedby1.1percentin2024butreboundedstronglyby5.1percentinthefirstthreequartersof2025,supportedbyfavorableweatherandimprovedcropyields.Manufacturingremainedsluggish—contractingby0.5percentin2024andgrowingby0.4percentinthefirstthreequartersof2025—inpartduetocontinuedweaknessindomestically-orientedandmid-tierexportindustries,despitesomeresilienceinhigh-endexportproducerssuchascomputersandcannedseafood.

3Forexample,surveysonconsumerssentimentsbyTheUniversityoftheThaiChamberofCommerce(UTCC)andMinistryofCommerce.

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Figure1.GDPgrowthbyDemandComponentsFigure2.PrivateInvestmentIndexandPrivateVehicleInvestmentIndex

%

15

10

5

0

-5

-10

-15

2019202020212022202320242025GovernmentexpenditureOthers

NetexportsChangeininventories

PrivateinvestmentPrivateconsumption

GDPgrowth

Source:NationalauthoritiesviaCEIC;andAMROstaffcalculations.Source:BankofThailand.

Note:Index(2018=100);seasonallyadjusted,3-monthmovingaverage.

Figure3.BoardofInvestment(BOI)PromotionFigure4.HeadlineInflation

Statistics

THB,bn

%

8

6

900

700

500

4

300

2

100

0

-100

Q1-18Q3-19Q1-21Q3-22Q1-24Q3-25Investmentpromotionnetapplications

Applicationsapproved

Certificatesissued

-2

-4

2019202020212022202320242025

EnergyRawfood

CoreinflationConsumerpriceindex

Source:BoardofInvestment(BOI).Source:BankofThailandviaCEIC.

4.Lookingahead,growthisprojectedtomoderatein2025–26amidnear-termheadwinds,butthemedium-termoutlookismorepositivegivenemergingpositiveshifts.Despitethestrongperformanceinthefirsthalfof2025,realGDPgrowthisprojectedtoslowto2.2percentin2025and1.9percentin2026.Thailand’srecentexportsurgeisexpectedtofadeandmayevenseea“payback”contractioninthesecondhalfof2025.Privateconsumptionandinvestmentarelikelytoremainconstrainedbyweakincomegrowthandelevateduncertaintyfromdomesticpoliticsandglobaltradetensions.Nonetheless,importantpositiveshiftsareunderway—includingthepivotofthedigitalwalletschemefromcashhandoutstoinvestment-ledfiscalstimulus,risinghigh-techinvestmentsinsectorslikeEVsanddatacenters,andanexpectationofcontinuedtourismrecovery—thatarehelpingtolayastrongerfoundationforamoreresilientmedium-termrecovery.Asthesegrowthdriversbecomemorefirmlyentrenched,economicgrowthisexpectedtostrengthensteadily,reachingabove3percentby2029.

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5.Thailand’slabormarketremainsbroadlystable.Theunemploymentrateheldsteadyat0.88percentinQ42024andinchedupslightlyto0.91percentinQ22025.Therobustlabormarkethasbeensupportedbyserviceindustries—includingtourism,hospitality,andrelatedtransport—whichcontinuetoabsorbnewworkersandsupporthouseholdincomes,evenashiringinsectorslikeautomotiveandconstructionremainssubdued.

6.InflationinThailandhasremainedpersistentlysoftandlargelybelowthetargetrange.Headlineinflationaveraged0.4percentin2024andfellintonegativeterritoryinQ22025(Figure4),mainlyduetosupply-sidefactorssuchaslowerenergyprices,governmentsubsidymeasuresandlowerrawfoodpricesfollowingfavorableweatherconditions.Coreinflationremainedlow,averaging0.6percentin2024andrisingmodestlyto0.8percentbyJuly2025,drivenmainlybyhigherpreparedfoodpricesfromthegradualpassthroughofrisinginputcosts.

7.Headlineandcoreinflationareprojectedtoremainsubduedthrough2025and2026.Headlineinflationisforecastat0.5percentin2025and0.8percentin2026,upfrom0.4percentin2024butremainbelowtarget.Coreinflationisexpectedtoreach1.0percentand0.8percentin2025and2026respectively,upfrom0.6percentin2024.Thesubduedtrajectoryforheadlineinflationismainlydrivenbylowerprojectedglobalenergyprices.Intheabsenceofsignificantsupply-sideshocks,inflationexpectationsareexpectedtoremainwellanchoredwithintheBankofThailand’sinflationtargetrangeof1to3percentgoingforward.

Authorities’views:TheauthoritiesbroadlyagreedwithAMRO’sassessmentoftheThaieconomy,notingthateconomicmomentumremainsfragiledespitestronger-than-expectedgrowthinthefirsthalf.Theauthorities’growthforecastsfor2025and2026areinlinewithAMRO’s,withdomesticdemandexpectedtoremainsoftamidweaktourismnumbers,risingimportcompetition,andsubduedprivatesectorsentiment.WhilegreenshootsareemergingfromFDIinflows,structuralweaknessespersist.

A.2ExternalSector

8.Thailand’scurrentaccountsurpluswidenedin2024andthefirstthreequartersof2025,supportedbyanincreaseintourismreceiptsandawideningtradesurplus.Thecurrentaccountsurplusincreasedfrom1.5percentofGDPin2023to2.1percentin2024and3.6percentinthefirstthreequartersof2025(Figure5).Theimprovementin2024wasprimarilydrivenbystrongtravelreceipts,whichhelpednarrowtheservicesdeficit.However,tourismrecoveryhasbeenbelowexpectationin2025,withtouristarrivalsdecliningby13.5percentandinternationaltourismreceiptsfallingby8.4percentinQ32025.Internationaltourismreceiptshavefallenlessthantouristarrivalsduetoamorediversifiedandhigher-spendingvisitorbase.Inthefirstthreequartersof2025,stronggoodsexportgrowth,particularlyinmachinery,boostedthesurplus.WhilesubduedinQ1,overallimports—machineryandgoldinparticular—gainedmomentumsinceQ2andnarrowedthecurrentaccountsurplus.

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Figure5.BalanceofPayment

Source:NationalauthoritiesviaHaver;andAMROstaffcalculations

Figure6.ExchangeRate

Source:NationalauthoritiesviaHaver;andAMROstaffcalculations

9.Thailand’sfinancialaccountrecordedadeficitin2024andQ12025,primarilydrivenbyrobustoverseasportfolioinvestmentbyThairesidentsandcontinuedforeignequityoutflows.Thaiinvestorssignificantlyincreasedtheirportfolioholdingsofforeignequitiesanddebtinstruments,whilenon-residentinvestorsfurtherreducedtheirexposuretoThaiequities.Incontrast,netdirectinvestmentturnedpositive,supportedbyareboundinFDIinflows,whichrosetoUSD9.8billion—upfromUSD7.0billionin2023—mainlyintotheelectronics,machinery,andautomotivesectors.OutwardinvestmentbyThaifirmsfellsharply,reflectingweakerriskappetiteamidglobaluncertainty.Nevertheless,thefinancialaccountturnedfromnetoutflowtoasmallinflow,aidedbylargerFDIinflowsinQ22025.Despiteeasingdomesticbondyields,persistentlylowinflationandastrongerbahtraisedexpectedrealreturns,supportingportfolioinflows

10.Thailand’sexternalpositioncontinuedtostrengtheninthesecondhalfof2024andinto2025.GrossinternationalreservesclimbedtoarecordhighofUSD273.3billioninSeptember2025,equivalenttoabout8.0monthsofimports.Externaldebtalsoimproved,decliningfrom38.8percentofGDPin2023to35.4percentinQ12025,largelyduetoareductioninlong-termdebt.Thiswasaccompaniedbyariseinthereserve-to-short-termdebtratioandadeclineintheexternaldebtserviceburden.

11.WhiletheThaibahtappreciatedagainsttheUSdollarnoticeablyfrommid-2024,theeffectiveexchangeratesremainedrelativelystable(Figure6).ThebahtmaintaineditsstrengthafteratemporarydipinQ42024.ThestrengtheningoftheThaibahtispartlysupportedbyastrongeroverallbalanceofpayments(Figure5)andalignswiththebroaderglobaltrendofaweakerU.S.dollar.Notably,boththenominalandrealeffectiveexchangerateshaveappreciatedtoalesserextent,reflectingthefactthatthecurrenciesofmanyofThailand’smajortradingpartnershavealsostrengthenedagainstthedollar,whileThailand’slowerinflationhashelpedoffsetrealappreciationpressures.

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A.3FiscalSector

12.Thailand’sfiscaldeficitisexpectedtowidenonaccountofstimulus-drivenpublicspending,whilerevenuecollectionhasheldupinlinewiththebudget.

Thefiscaldeficitisprojectedtowidento4.5percentofGDPinFY2025from4.0percentinthepreviousyear.

4

ExpenditureinFY2025isexpectedtoriseto19.6percentofGDPfrom19.3percentinFY2024withthecontinuationofthedigitalwalletprogram,whichwassuspendedinMay2025andredirectedtoinvestment-ledfiscalstimulusinrecognitionofthecurrenteconomicconditions.

5

Meanwhile,revenueisprojectedtoremainbroadlystableat15.1percentofGDP,supportedbysteadyincome-basedtaxes.ForFY2026,revenue-to-GDPisexpectedtoreach15.0percentandexpendituretodeclineto19.1percentofGDP,narrowingthedeficitto4.1percent.BeyondFY2026,theauthoritiesplantoconsolidatefurtherbynormalizingexpenditureandimplementingtaxmeasurestoreducethedeficittoaround3.4percentofGDPoverthemediumterm(Figure7to9).

Figure7.GovernmentRevenue

Source: