The Thai economy is facing challenges, and the government has announced a proposed 500 billion baht ($13.7 billion) handout scheme to boost it. This scheme, known as the “digital wallet,” involves transferring 10,000 baht ($275) to 50 million Thais to be spent within six months. However, concerns about its funding have been raised, with some experts calling it fiscally irresponsible.
The government had initially aimed to distribute the funds by May but now anticipates doing so in the fourth quarter of the year. The Prime Minister stated that the finance ministry and Budget Bureau were exploring different funding options for the scheme, including the possibility of a borrowing bill. He emphasized the importance of boosting the economy, especially given the low growth rates experienced over the past decade.
In 2023, the Thai economy unexpectedly contracted in the final quarter, leading to a full-year growth rate of 1.9%, lower than the 2.5% growth seen in 2022. The state planning agency has revised its 2024 growth forecast to between 2.2% and 3.2%. Discussions about funding sources for the handout scheme will be held at an upcoming meeting on April 10, where the plan’s details will be finalized.
One potential option for financing this scheme is through borrowing from foreign institutions or international financial markets; however, there are risks associated with such borrowing options that must be carefully considered before making a decision.
It is crucial that any measures taken to stimulate economic growth are sustainable and do not create long-term problems for future generations of Thais. As such, policymakers should carefully weigh all available options before making any decisions on how best to fund this handout scheme.
Despite differing opinions on whether this handout scheme is fiscally responsible or not, both Srettha Thavisin and central bank governor agreed that urgent measures need to be taken to stimulate economic growth in Thailand.
In conclusion, while this handout scheme may provide short-term relief for struggling Thais and stimulate economic growth in the short term, policymakers must ensure that it does not create long-term problems or exacerbate existing issues within Thailand’s economy. By carefully weighing all available options and considering their potential impact on future generations of Thais, policymakers can make informed decisions about how best to fund this critical initiative towards boosting economic growth in Thailand.
