Thai Prime Minister considers funding options to boost economy with $13.7 billion handout plan

Thai Government’s Digital Wallet Handout Scheme Faces Funding Concerns

Thai Prime Minister Srettha Thavisin has announced that the country’s economy is facing challenges and needs a boost through a proposed 500 billion baht ($13.7 billion) handout scheme known as the “digital wallet.” The scheme involves transferring 10,000 baht ($275) to 50 million Thais, who are expected to spend it within six months. However, concerns have been raised about the funding of this scheme, with some experts calling it fiscally irresponsible.

The government had originally aimed to distribute the funds by May but now anticipates doing so in the fourth quarter of the year. Srettha 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.

The Thai economy unexpectedly contracted in the final quarter of 2023, 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 details will be finalized.

One potential option for financing this scheme is through borrowing from domestic or foreign sources such as banks or other financial institutions. Another option could be through public-private partnerships or through international aid programs.

Despite differing opinions, both Srettha and central bank governor agree that urgent measures need to be taken to stimulate growth in order to address economic challenges faced by Thailand.

Overall, while there may be concerns about funding this scheme, it is clear that action must be taken if Thailand wants to boost its economy and overcome its current challenges.

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