Thailand’s 500 billion baht ($14.3 billion) “digital wallet” stimulus plan is on track to proceed on schedule in May, Prime Minister Srettha Thavisin told reporters yesterday, despite some lingering uncertainty about his government’s use of loans to pay for the scheme.
Speaking to reporters yesterday, Srettha, who also serves as Thailand’s finance minister, said that he would meet the country’s central bank governor today to discuss the stimulus plan and other matters.
The “digital wallet,” which will benefit most Thais over the age of 16, was among the Pheu Thai Party’s promises at last year’s general election, and is intended to deliver a jolt of life to the sluggish Thai economy.
The 10,000 baht (around $285) stimulus payments, which eligible Thais will be able to receive via a mobile app and will be permitted to spend in their local communities, are aimed at spurring consumption and overall growth. Srettha’s comments came two days after his administration said it had received the green light to take out loans to finance the scheme.
Since taking office last September, Srettha’s government has made clear its intention to boost growth to at least 5 percent each year, after an estimated growth of 2.4 percent in 2023, due in large part to the slow recovery of the country’s tourist sector. The Thai Chamber of Commerce said this week that if implemented as planned, the digital wallet stimulus could add a further 1.0-1.5 percentage points to this year’s GDP growth, Reuters reported.
The stimulus plan has faced criticism from economists and former central bank governors, who have expressed concerns about its sheer cost and the potential that it might put inflationary pressures on the Thai economy. In response to these concerns, the government conducted a review of the plan, and later trimmed the size of the stimulus, from 560 billion to 500 billion baht. Many critics had hoped for a sharper reduction.
There was also the question of how Srettha’s government would justify the urgency of a parliamentary bill seeking to borrow money to finance the scheme. Last year, his government sought advice from the Office of the Council of State, an independent panel that provides non-binding advice to governments, on the legality of its proposed borrowing bill. On Monday, Deputy Finance Minister Julapun Amornvivat announced that the Council had found no reason that would prohibit the government from borrowing to fund the plan. He said that the digital wallet scheme “can be done” under the power of the cabinet and the digital wallet committee.
However, the Office has challenged Julapun’s characterization of his advice, raising questions about whether the scheme will be ready by May.
The Nation reported on January 7 that the Council “has given its opinion against” the government’s plan to finance its digital wallet scheme with a 500 billion baht loan. Pakorn Nilprapunt, secretary-general of the Council, expanded on this in remarks to reporters yesterday, denying the government’s claims that it had given the go-ahead for the scheme. He said that the council’s response to the Finance Ministry was confidential and only the ministry could disclose the details. “However, it definitely does not contain any indication of a ‘greenlight’,” Pakorn said, The Nation reported.