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Unleashing Digital Currency: Thailand’s Mega 600 Billion Baht Injection Set to Revive Sluggish Economy!

The buzz surrounding the government’s digital wallet initiative has finally been won over by Prime Minister Srettha Thavisin. On Friday, he announced that the program will kick off in May, with approximately 50 million individuals being eligible for a 10,000-baht handout. The state plans to stimulate the economy with an injection of 600 billion baht – 500 billion from the digital wallet program and an additional 100 billion baht fund to strengthen the country’s economic potential.

Srettha spoke at a televised press conference about the ambitious plan. Every Thai citizen above the age of 16 and earning less than 70,000 baht per month, with a bank deposit of less than 500,000 baht will be entitled to receive 10,000 baht in digital currency. This is expected to benefit around 50 million people, slightly fewer than the initial target of 56 million.

However, those earning over 70,000 baht a month and having less than 500,000 baht in bank deposits will be excluded. The same applies to those with a monthly income of less than 70,000 baht and more than 500,000 baht in the bank.

According to Srettha, these cash incentives will reinvigorate the sluggish economy that has seen less than 2% annual growth over the past ten years, a disappointing statistic for Southeast Asian economies.

The digital wallet program sees the 10,000 baht in digital money transferred to the Pao Tang mobile app’s digital wallet, which is already used by millions of people. This process will commence in May, three months later than originally scheduled.

The digital money must be spent within six months in the district where the recipient resides and it cannot be transferred to others or converted into cash. The fund can be used for food and other consumer goods, but it cannot be used to buy online goods, cigarettes, alcohol, cash coupons, or valuable items, such as diamonds and gold. It cannot be used to settle debts or utility bills, fuel, natural gas or educational fees.

Businesses need to register to participate in the program and must be within the tax system. In parallel, the new 100-billion-baht fund, according to Mr Srettha, will be used to bolster the country’s competitiveness in various sectors, including investment in emerging technologies and human resource development. The fund aims to attract skilled individuals from various fields to join in fostering economic growth.

Srettha emphasized that the digital money initiative is not a welfare scheme but an economic stimulus. Designed to enable citizens to partner with the government in recovering the nation’s economy, it comes with a strict adherence to public financial discipline. He urged eligible citizens to spend their digital money with pride, stating that everyone plays a role in the country’s economic stability and growth.

The funding source for the program has been a point of contention, with critics warning that borrowing could escalate public debt to perilous heights. Nevertheless, Srettha suggests that the most viable strategy for the government is to seek a special loan of 500 billion baht. The proposed bill will be submitted to the Council of State by year-end to ensure compliance with regulations and will be put forward at parliament early next year for discussion.

The political coalition led by the Pheu Thai Party, encompassing 11 parties, has a reliable majority in parliament. No parties in the coalition oppose the digital wallet initiative, as reported by local media outlets. Srettha expressed his confidence in the bill’s ratification by parliament in accordance with Section 53 of the State Fiscal and Financial Discipline Act of 2018, ensuring the program’s launch next May. The remaining 100 billion baht for economic enhancement projects would be sourced from state budgets, he added.

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