The launch of a 145-billion-baht handout programme to assist the needy next week is certain to provide a much-needed “jolt” to the economy, Prime Minister Paetongtarn Shinawatra announced on Tuesday, as her government unveiled plans for further stimulus measures. The cabinet on Tuesday formally sanctioned the distribution of 145 billion baht, constituting about one-third of the amount earmarked in the original “digital wallet” scheme, set to commence on Sept 25.
The first recipients of this highly anticipated economic boost will be low-income earners and vulnerable groups, signaling the start of an ambitious stimulus drive aimed at revitalizing an economy that managed a meager 1.9% growth last year, falling significantly behind its regional peers. The Finance Minister, Pichai Chunhavajira, revealed in a briefing post-cabinet meeting that beneficiaries would encompass 12.4 million state welfare cardholders and 2.15 million people living with disabilities.
Less than 40 million Thais over the age of 16 are currently anticipated to enroll for the 10,000 baht payments, primarily via a smartphone application, with a spending window of six months confined within their communities. This is a reduction from the previously estimated 45-50 million enrollees. According to the Ministry of Finance, about 14.5 million people are slated to receive payments next week directly into their bank accounts via PromptPay.
“From the figures at hand, the first vulnerable group receiving 10,000 baht has a high inclination to spend, and thus there will surely be a significant jolt to the economy,” Ms. Paetongtarn assured reporters. The initial injection is expected to enhance economic growth by 0.35 percentage points, stated Pornchai Thiraveja, the head of the Fiscal Policy Office.
This measure stands as the flagship policy of the coalition-leading Pheu Thai Party, which is eager to invigorate an underperforming economy hampered by substantial household debt, sluggish spending, and a slow export recovery. The Bank of Thailand anticipates the economy will experience just a 2.6% growth this year.
Deputy Finance Minister Julapun Amornvivat emphasized the digital facet of the handout would persist, as it’s part of the government’s broader scheme to foster a digital economy, which will also include a blockchain-backed payments infrastructure. Finance Minister Pichai noted that the timing and mode of distribution for the second phase of the handout are currently under review, hinting at more stimulus measures in the pipeline.
Ms. Paetongtarn, who assumed office earlier this month, braces against the daunting task of propelling growth in an economy debilitated by near-record household debt levels, cheap imports from China, and weak export performance. The funding for this handout will be sourced from the 122 billion baht supplementary budget and a portion of the annual budget for the 2024 fiscal year ending on Sept 30, as stated by Mr. Pichai.
In related developments, market insiders and a government presentation divulged to Reuters indicate that the government intends to elevate borrowing by 8% to approximately 2.6 trillion baht for the 2025 fiscal year starting on Oct 1. Of this projected total, 1.06 trillion baht will constitute new borrowing while 1.53 trillion baht will be debt rollovers, according to unidentified sources due to the unpublished nature of the information.
The government aims to sell around 1.25 trillion baht in government bonds and 520 billion baht in treasury bills during the 2025 fiscal year, accounting for more than two-thirds of the borrowing target, sources disclosed.
This sounds like a total waste of money. How do they expect a handout to solve deep-rooted economic problems?
It’s not a permanent fix, but it’s a temporary relief for those who are in need. Hunger today can’t wait for long-term solutions.
Exactly, Lila. Sometimes people don’t realize how immediate needs have to be addressed first.
Aid is important, but we also need to focus on the structural changes required for long-term economic stability.
Short-term boosts can lead to long-term dependency. This looks more like a political move than an economic strategy.
I’m struggling to see how this digital wallet idea will work for older folks without smartphones.
They mentioned alternative ways for people to receive the money, but I agree, the digital gap is a concern.
True, they need better education on how to use these technologies.
Older folks should just ask their kids or neighbors to help. It’s not that hard.
But not everyone has someone tech-savvy around. They should have more accessible options.
145 billion baht sounds like they’re printing money. I’m worried about inflation.
Inflation is a legitimate concern. But if managed well, it could stimulate spending without spiraling prices.
The real challenge is striking that balance. The Thai government doesn’t have the best track record with this.
Printing money is how countries get into deep trouble. Look at Zimbabwe!
Expanding the digital economy is great, but they should integrate blockchain solutions more robustly to ensure transparency.
Yes! Blockchain will ensure that corruption is minimized. This could be revolutionary if done right.
Blockchain is not a magic bullet. Plenty of scams in that space too.
This government handout ignores agricultural sectors entirely. We’re struggling too!
True, the focus is too urban-centric. Rural areas are in desperate need as well.
Exactly! Agriculture is the backbone of this country. If we fall, the whole economy will feel it.
I think this is a well-timed initiative. We’ve been lagging behind our neighbors for too long.
Absolutely, our economy needs this push. It’s not perfect, but it’s a step forward.
Focusing on a digital economy is key to our future growth. Blockchain, digital wallets… we need to catch up with global trends.
It’s infuriating that the government is borrowing so much money. What about our future generations who will have to pay this debt off?
Yes, but if it leads to significant economic growth, it may be worth the risk in the long term.
Future generations should also benefit from a stronger economy if this works out as intended.
I’m skeptical. This sounds like vote buying just before the elections.
Finally, a policy that seems to understand that low-income earners need a break. Much better than tax cuts for the rich.
Thai economy needs broad reforms, not just handouts. We need to be competitive against China and Vietnam.
Absolutely, we are falling behind in critical sectors. A handout is a quick fix, not a solution.
Just imagine the corruption possibilities with so much money flying around. Need stricter oversight.
Yes, oversight is crucial. Without it, this entire program could be a disaster.
Pheu Thai is clearly setting themselves up for the next elections. All these populist measures are politically motivated.
The digital wallet sounds great but they should have included a way to educate people about its usage more effectively.
As someone who received government aid during COVID, these programs can be a lifeline. I just hope it gets to the right people.
Will there be any monitoring to ensure this money is spent within the community and not wasted?
Well, at least they are trying something. Better than doing nothing and watching the economy sink further.
Isn’t this just increasing our national debt? I’m concerned about the long-term impact.
They should have focused more on improving our education and healthcare systems. That’s long-term growth.
Despite all the criticisms, this handout could mean a lot for people barely surviving. Sometimes empathy is more essential than economic theories.
Are there any safeguards in place to ensure that this handout reaches the genuinely needy and doesn’t get siphoned off?