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

Thai Prime Minister Announces Digital Wallet Plan Amid Financial Concerns, but Experts Question Fiscal Responsibility

Thai Prime Minister Srettha Thavisin announced on Wednesday that the economy was facing challenges and needed a boost from a proposed handout scheme worth 500 billion baht ($13.7 billion). This scheme, known as 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 arisen, with some experts questioning its 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 the Budget Bureau have been tasked with exploring potential funding sources for the scheme, in addition to considering a borrowing bill. He emphasized the importance of boosting the economy, which has experienced low growth over the past decade.

While the government has approved the budget for the 2024 fiscal year in recent days, it has faced challenges in seeking a borrowing bill to finance the handout program. Srettha has labeled the current economic situation as a crisis that requires urgent stimulus measures. However, concerns about inflation and debt levels have led many experts to question whether such measures are sustainable in the long run.

With growth slowing down unexpectedly in 2023 and full-year growth at just 1.9%, below expectations of 2.5% in 2022, it’s clear that action needs to be taken if Thailand is to get back on track economically. The state planning agency has revised its outlook for 2024 with new projections ranging from 2.2% to 3.2%, down from earlier estimates of 2.7% to 3.7%. The government plans to discuss financing options for this scheme at its next meeting on April 10th where further details will be finalized.

The central bank governor acknowledges slower-than-expected growth and structural issues in the economy but also expressed his concern over inflationary pressure resulting from stimulus measures.

In conclusion, while Thailand needs urgent action to boost its economy, any stimulus measures must be carefully considered and well thought through before they are implemented

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