Thailand’s Digital Wallet Scheme Falters: Rising US Tariffs Strain Economy and Political Promises

It’s been a bit of a rough ride for Thailand’s ruling Pheu Thai Party, much like trying to paddle a boat through molasses. Supporters like Rungthiwa Pimphanit, who were eagerly awaiting a much-needed cash boost of 10,000 baht, are left feeling as abandoned as a forgotten dessert at a buffet. Ms. Pimphanit, a 34-year-old government employee from Nong Bua Lam Phu, had banked on this handout to pay for her son’s school gear. Instead, she faces a classroom bell ringing empty. “I’m very disappointed and angry,” she expressed, vowing never to vote for the party again.

This much-anticipated scheme was supposed to be Pheu Thai’s crown jewel, revitalizing Southeast Asia’s second-largest yet sluggish economy. Alas, it seems this economic lifebuoy has been punctured by the robust tariffs proposed by the United States. Prime Minister Paetongtarn Shinawatra acknowledged the setback, though analysts warn that failing to deliver their flagship promise might just be the political equivalent of stepping on a rake.

“If they can’t maintain their promises, who’s going to believe them?” noted Thanaporn Sriyakul, director of the snappily named Political and Policy Analysis Institute. The sentiment is echoed in the whispers and mutterings of a population that’s beginning to feel peeved. “They have to do what they said they’d do, or it’s over.”

Yet, it’s not quite game over for Pheu Thai. With two years before the next polls, there still might be time for a political resurrection. Government spokesperson Jirayu Houngsub remains optimistic, hinting at future economic offerings that might be as appealing as free ice cream on a hot Thai day.

Statistics tell a story of their own. A survey conducted by the National Institute of Development Administration showed about 60% of respondents like the handout scheme like kids love candy. However, if the scheme is scrapped, 46% might be left with a sour taste, akin to biting into a lemon. Bangkok native Sathanee Siriphonchaikul, 52, is among those disenchanted voters who had planned to invest in a snazzy new washing machine with her handout. “I’m upset,” she lamented, “The economy is bad; this might be the rinse and repeat of unfulfilled promises.”

Sukhum Nuansakul, the ever-keen political analyst, critiques the digital wallet initiative as if it were a flat souffle—something hoped for but never fully realized. “It hasn’t worked,” he adds dryly. The hopes of millions seemingly evaporated like early morning dew.

Even the opposition chimes in, with Thirachai Phuvanatnaranubala, deputy leader of the Palang Pracharath Party, urging the government to come clean. “People deserve the truth—that it’s budget and technical problems halting the programme,” his statement read, echoing with a forthrightness that could knock over a feather.

Meanwhile, the grand stimulus plan flounders, straining to generate the economic pizzazz it promised. Consumption refuses to budge, akin to a stubborn mule, as many recipients use the funds to grapple with debt. With household debt brushing against the ceiling at 88.4% of GDP, it’s a little like trying to fill a sieve with water.

Initially packaged as a financial firework capable of catapulting Thailand’s economy to a peppy 5% growth post-pandemic, the reality has been more of a sputtering sparkler. Last year saw growth hovering at a tepid 2.5%, leaving Thailand trailing behind its Southeast Asian cousins like a tired tortoise.

Since September’s debut of this ambitious program, only a third of the hefty 450 billion baht has found its way to those in need. So far, the funds have mainly served welfare cardholders, the elderly, and people with disabilities. Now, the next funds—originally destined for the digital wallet scheme—are being repurposed to cushion the economy against the anticipated thud of US tariffs.

Ms. Paetongtarn, adopting a prudent stance, announced the strategic diversion of funds with the cool composure of a seasoned poker player. “It’s necessary to utilize the money for more urgent needs,” she explained, the shadow of a looming US tariff hanging over her words.

Thailand faces an escalating US tariff, rising from 10% to a potentially stifling 36% if a negotiated truce can’t be reached by July. The National Economic and Social Development Council has already had to temper its forecasts, dialing back expected growth for the year to a restrained snip of 1.3% to 2.3%.

Prakit Siriwattanaket from Merchant Partners Asset Management doesn’t mince words, seeing politics and policy as cards on the table that didn’t quite deliver a winning hand, “It’s excessively wasteful,” he remarked, as the digital wallet project finds itself short of delivering economic sweetness and light.