June 21, 2024

Thailand Unveils $13.7 Billion Handout Plan, but Fiscal Responsibility Concerns Surface

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

In an announcement on Wednesday, Thai Prime Minister Srettha Thavisin acknowledged that the economy was facing challenges and required a boost through a proposed handout scheme worth 500 billion baht ($13.7 billion). The “digital wallet” plan would involve transferring 10,000 baht ($275) to 50 million Thais to be spent within six months. However, concerns about the funding for this scheme have emerged, with some experts questioning its fiscal responsibility.

The government has decided to delay the distribution of funds until the fourth quarter of the year, shifting from the initial timeline of May. Srettha revealed that the finance ministry and Budget Bureau are exploring potential funding sources for the scheme, in addition to considering a borrowing bill. He emphasized the importance of stimulating economic growth, which has been low over the past decade.

The state planning agency has revised its 2024 growth outlook due to unexpected contraction in the final quarter of 2023 and full-year growth at 1.9%, below the 2.5% growth in 2022. The new projection ranges from 2.2% to 3.2%, down from the previous estimate of 2.7% to 3.7%. The government plans to discuss financing options for the handout program at its next meeting on April 10th, where further details will be finalized.

While Thailand’s Budget has already been approved for the 2024 fiscal year, securing a borrowing bill for financing remains a challenge for this handout program. Srettha views this as an economic crisis that requires urgent stimulus measures; however, central bank governor has expressed reservations about slower-than-expected growth and structural issues in Thailand’s economy.

Despite these challenges, Prime Minister Thavisin is determined to boost economic recovery by implementing policies aimed at creating jobs and increasing consumer spending while also addressing structural issues affecting long-term growth prospects.

In conclusion, Thailand is facing significant challenges in its economy due to factors such as low growth rates and structural issues affecting long-term prospects

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