On the vibrant morning of August 1, 2024, excitement filled the air as a man eagerly signed up for the digital wallet scheme on its very first day. This initiative is a key component of the grand vision laid out in the 2025 budget, which includes a special provision to partially finance this innovative program. (Photo: Apichart Jinakul)
With a resounding sense of purpose, the House of Representatives has triumphantly passed a colossal 3.75 trillion baht budget for the fiscal year starting in October. This robust financial plan empowers the newly-appointed Prime Minister, Paetongtarn Shinawatra, to bolster state spending and inject much-needed momentum into the budding economic recovery. The budget bill, championing a 4.2% increase in government spending compared to the current year’s revised outlay, garnered immense support from 309 lawmakers in its conclusive third reading in the 500-member House late Thursday. However, 155 lawmakers offered a dissenting vote after an intense three-day debate.
As legislative proceedings progress, the bill now journeys to the Senate for its final seal of approval. Once graced by the Royal Gazette, it will spring into action, marking a pivotal moment for Thailand’s economic trajectory.
This ambitious budget includes a strategic allocation to partially fund the contentious cash handout scheme designed to spark a surge in consumer spending and rejuvenate the manufacturing sector. Prime Minister Paetongtarn faces the daunting task of revitalizing Southeast Asia’s second-largest economy, which currently grapples with near-record household debt, sluggish export activities, and a manufacturing landscape overshadowed by inexpensive imports, predominantly from China.
The new leader has vowed to navigate the nation through this economic “crisis” and is poised to reveal the intricate details of her government’s comprehensive policies in Parliament next week. Central to her strategy is the reimagined “digital wallet” program, promising 10,000 baht to nearly every adult Thai citizen. This bold initiative aims to catapult economic growth to an ambitious 5%, a stark contrast to the average sub-2% growth rate experienced over nearly a decade of military-backed governance.
Optimism is palpable in Thailand’s financial circles, which have welcomed the cessation of prolonged political instability. The benchmark SET Index has surged approximately 9% since Ms. Paetongtarn’s nomination as the country’s new leader on August 15. Concurrently, the baht has appreciated by about 3.7%, hitting its highest level in over a year. This rally is part of a broader wave of enthusiasm spurred by anticipated rate cuts from the US Federal Reserve later this month.
The proposed budget rests on a foundation of deficit financing amounting to 866 billion baht, equating to 4.5% of the gross domestic product, with projections of economic growth ranging between 2.8% and 3.8% for the coming year. Additionally, the government projects headline inflation to hover between 1.1% and 2.1%, while the current account surplus is estimated at 1.6% of GDP.
What a waste of money! 10,000 baht handouts? This will just lead to more inflation and won’t fix the real issues.
Couldn’t disagree more. It’s a strategic move to boost consumer spending and stimulate the economy. People need support!
It’s a temporary fix, Natasha. What happens when the money runs out? People need jobs, not handouts.
Larry’s right! Jobs and a sustainable economy are key. Handouts are just a quick fix.
This budget is ambitious. If executed correctly, Thailand could see major growth. But they need to tackle corruption first.
Corruption is definitely an issue, but isn’t it worth trying something new to get the economy moving?
Sure, but without addressing corruption, new initiatives may just become another channel for graft.
If they can’t solve corruption, nothing will change. We’ve seen it over and over again.
Excited about the digital wallet scheme. Anything to reduce dependence on physical cash is a win!
I have to say, the economic policies seem promising. But what about the long-term effects on national debt?
That’s a valid concern, Patty. An 866 billion baht deficit isn’t sustainable if the growth projections don’t materialize.
Typical politician promises. Let’s see if any of this actually happens.
I am cautiously optimistic. The revamp of economic policies is needed, but execution will be key.
I’m just thrilled the SET Index is up. My stocks are finally recovering!
10,000 baht is not going to solve household debt problems. We need to find bigger solutions to these issues.
Right on, Chantra. Those with significant debt will hardly see an impact with 10,000 baht.
As a young professional, this gives me hope. Our previous government didn’t offer much. Let’s see how this works out.
Don’t be too hopeful. Government schemes have a record of failing us.
Paetongtarn Shinawatra has taken a bold step. Whether it will succeed depends on implementation and global economic conditions.
Absolutely, global factors will play a huge role. Thailand isn’t an isolated island.
Remember how the stock market was before this? Better now, better economy soon?
Why is no one talking about the effect on small businesses? They are the backbone of the economy!
This budget still needs Senate approval. Don’t celebrate too soon!
Chang, you’re right. It’s not a done deal until it’s in action. Fingers crossed.
It’s exciting and a bit overwhelming. Let’s see if these policies can truly transform the economy.
Digital wallets are the future. This could put Thailand ahead in fintech.
Given the current account surplus, it seems they’ve calculated the risks. Time will tell if they were right.
Instead of handouts, why not invest that money in infrastructure or education?
Agreed, Naret. Long-term investments like education will have a more lasting impact.
Exciting times ahead! This could be the start of a Thai economic miracle.
A miracle? More like a gamble. Let’s see if it pays off.