Finance Minister Ekniti Nitithanprapas has defended the government’s 400-billion-baht emergency loan decree as essential to economic security as the energy crisis pushes the current-account deficit towards 600 billion baht.
Speaking in the House on Wednesday, Mr Ekniti, also a deputy prime minister, took part in a debate on the decree authorising the Finance Ministry to borrow up to 400 billion baht to address the energy crisis and accelerate the energy transition.
He said the measure was introduced on economic-security grounds, with spending subject to scrutiny.
The latest second-quarter economic figures supported the government’s assessment, he said, with the economy slowing, inflation rising and the current-account balance swinging to a deficit of almost 600 billion baht in a single quarter, following higher oil and imported energy costs linked to the Middle East war.
Unlike previous crises, which began with negative GDP growth, this crisis started with higher energy prices, living costs and production costs, he said.
Oil prices had risen by 60-70%, inflation had climbed from negative territory to almost 3%, while the producer price index had increased by nearly 10%. Private consumption growth slowed to 1.9% in the second quarter from 3.3%.
“If costs continue to rise, businesses may have to cut workers or shut down. This is economic security. It is not just about figures on paper, but about people’s living costs and livelihoods,” he said.
Mr Ekniti said the decree had two main objectives. The first was to assist people, farmers and businesses affected by the energy crisis through the Thais Help Thais Plus co-payment scheme. The second aim was to accelerate the energy transition by reducing dependence on fossil fuels and imported energy while promoting renewable and alternative energy, alongside innovation.
The government also plans to support household solar power to reduce electricity bills and allow people to sell electricity back to the grid.
Prime Minister Anutin Charnvirakul told the House the Middle East war had disrupted energy production, infrastructure and transport routes, particularly around the Strait of Hormuz.
Thailand imports almost 50% of its oil from the Middle East and remains heavily dependent on fossil fuels, leaving households and businesses vulnerable to higher costs and weaker purchasing power.
He warned that rising living and production costs could increase the risk of stagflation.
He said normal fiscal resources were insufficient and too slow, noting that the 2026 central budget of 99 billion baht had already been committed to urgent needs including disasters and border security, while additional spending needs were estimated at 140 billion baht.
With the 2026 budget already 72% spent and the 2027 budget not due to take effect until October, an emergency decree was necessary. The 400 billion baht would be divided equally: 200 billion baht for assistance to those affected by the energy crisis and 200 billion baht for energy efficiency, renewable and alternative energy, skills and innovation.
Opposition leader Natthaphong Ruengpanyawut said the opposition did not object to the first 200 billion baht for immediate relief but opposed the second tranche, arguing the government lacked a clear investment plan and could use alternative funding sources.
Democrat Party MP Korn Chatikavanij also opposed the decree, warning temporary stimulus would not resolve structural economic problems and increased borrowing could put further pressure on the 70% public-debt-to-GDP ceiling.