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

Thailand Announces $13.7 Billion Handout Scheme to Boost Economy, Sparking Concerns about Funding and Success

The Thai Prime Minister, Srettha Thavisin, announced on Wednesday that the economy was facing challenges and required a boost from a proposed 500 billion baht ($13.7 billion) handout scheme. This scheme, known as the “digital wallet,” involved transferring 10,000 baht ($275) to 50 million Thais to be spent within six months. Despite the benefits of this scheme, concerns about its funding have been raised, with some experts calling it fiscally irresponsible.

The government had initially 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.

In 2023, the Thai economy unexpectedly contracted in the final quarter, 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 the plan’s details will be finalized.

One potential option for financing this scheme is through borrowing from foreign institutions or other sources such as bonds or loans from banks or financial institutions.

The central bank governor also agreed with Srettha that urgent measures were needed to stimulate economic growth and suggested that they consider implementing monetary policies such as reducing interest rates or increasing liquidity in financial markets.

Despite differing opinions on how best to fund this initiative, both Srettha and central bank governor agreed on one thing: that urgent action was necessary to get Thailand’s economy back on track after years of low growth rates.

The government is expected to announce more details about their plans during an upcoming press conference on April 8th where they will provide more information on how they plan to implement this stimulus package and what measures they are taking to ensure its success.

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