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Thai PM: digital wallet scheme to be rolled out by May

January 9, 2024
in Business
Thai PM: digital wallet scheme to be rolled out by May
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Thai PM expects multibillion $ handout scheme to be rolled out by May
© Reuters. FILE PHOTO: Srettha Thavisin, Prime Minister of Thailand, speaks at the Asia-Pacific Economic Cooperation (APEC) CEO Summit in San Francisco, California, U.S., November 15, 2023. REUTERS/Carlos Barria/File Photo

BANGKOK (Reuters) -Thailand’s plan to kick-start its economy via a $14.3-billion cash handout programme will proceed by May, Prime Minister Srettha Thavisin told reporters on Tuesday.

His comments come after the Office of the Council of State, an independent panel that provides legal advice to governments, found no reason that would prohibit Srettha’s cabinet from borrowing to fund the scheme.

The programme to give away 10,000 baht (around $285) to 50 million Thais to spend in their local communities was the signature election campaign policy of the ruling Pheu Thai party.

The handouts, which the government has termed ‘digital wallet’ programme as Thais will be able to receive the funds via a mobile app, are aimed at spurring consumption and overall growth.

The government wants to boost growth in Southeast Asia’s second-largest economy to at least 5% each year, with last year’s growth forecast at 2.4%.

The handout plan has come under fire from economists and some former central bank governors who say it could be fiscally irresponsible and fuel inflation.

Srettha, who is also finance minister, said he would meet the country’s central bank governor on Wednesday to discuss the stimulus plan and other matters.

The premier this week criticized the Bank of Thailand for its interest rate hikes, saying they hurt small businesses at a time when inflation is low.

“There might be disagreements, but there must be a conversation,” Srettha said, adding that it was a routine discussion.

On Tuesday, the Thai Chamber of Commerce said it expected the economy to grow at least 3% year-on-year in the first quarter of 2024, and at a 3.2% pace for the full-year, helped by tourism and exports.

The digital wallet scheme, if implemented as planned, could add a further 1.0-1.5 percentage points to 2024 growth, the chamber said, adding it also hoped the central bank would cut interest rates to support the economy.

Thailand’s headline consumer price index (CPI) dropped 0.83% in December, staying below the central bank’s inflation target of 1% to 3% for the eighth straight month.

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