Thailand’s Digital Wallet Plan: A Daring Effort to Boost an Ailing Economy, But Can it Succeed?

Thai Prime Minister considers funding options for $13.7 billion stimulus package to bolster economy

The Thai economy is facing challenges, and the government has announced plans to boost it with a handout scheme worth 500 billion baht ($13.7 billion), known as the “digital wallet” plan. This initiative involves transferring 10,000 baht ($275) to 50 million Thais, who must spend it within six months. However, concerns have arisen about the funding for this scheme’s fiscal responsibility.

The government has decided to delay the distribution of funds until the fourth quarter of the year, pushing back from the initial timeline of May. Srettha revealed that the finance ministry and Budget Bureau are exploring potential funding sources for this scheme, including a borrowing bill. He emphasized the importance of boosting the economy, which has experienced low growth over the past decade.

Despite recent efforts to stabilize it, Thailand’s economy continues to contract unexpectedly in various sectors. As a result, full-year growth in 2023 was only at 1.9%, below the 2.5% growth rate recorded in 2022. The state planning agency has revised its growth forecast for 2024, ranging from 2.2% to 3.2%, down from an earlier estimate of 2.7% to 3.7%. The government plans to discuss financing options for this program during its next meeting on April 10th.

While Thailand’s Prime Minister Srettha has approved the budget for fiscal year 2024 and sought a borrowing bill to fund this stimulus program, he faced significant challenges in doing so due to concerns about fiscal responsibility.

Srettha called for urgent action as he described current economic conditions as a crisis that required immediate stimulus measures.

However, Bank of Thailand Governor saw things differently and acknowledged slower-than-expected growth and structural issues in Thai economy.

The digital wallet plan may be seen as one way out of this economic crisis but also raises questions about its long-term viability and sustainability.

As Thailand seeks ways to jumpstart its slowing economy amidst global economic uncertainties, some experts warn that relying heavily on such short-term solutions could lead to more significant problems down the line.

It remains uncertain whether Thailand’s government will succeed in securing funding for this ambitious program or whether it will ultimately prove effective in revitalizing an already struggling economy.

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