Thailand’s Prime Minister Paetongtarn Shinawatra has again confirmed that her new government will proceed with the controversial stimulus program introduced by recently ousted PM Srettha Thavisin.
Speaking to reporters yesterday, however, Paetongtarn flagged another change to the 450 billion baht ($13.1 billion) “digital wallet” scheme, saying that a portion of the stimulus package will be distributed in cash rather than digitally, Reuters reported.
Last month, Paetongtarn became Thailand’s youngest ever prime minister, and the third member of her family to lead the country, after her predecessor Srettha Thavisin was removed from office by the Constitutional Court for a “gross ethical violation.” Prior to his removal, Srettha’s administration had begun enrolling eligible Thais for the stimulus program, which would see them receive one-time handouts of 10,000 baht ($292), which are expected to be distributed in the fourth quarter of the year.
The “digital wallet” scheme, which is expected to benefit around 45 million people, was the centerpiece of the Pheu Thai Party’s goal of reviving the Thai economy, which has grown at a sluggish pace since the COVID-19 pandemic. In January, Srettha told reporters that the Thai economy “is not doing well and is in crisis” and his administration promised that the payments would deliver a stimulating jolt to the economy. Under the scheme, around 45 million Thais would receive 10,000 baht payments via a smartphone application, which they would have six months to spend within their localities.
However, after Srettha’s fall, it was unclear whether the new government would proceed with the program, which has been controversial since Pheu Thai unveiled it prior to last year’s general election. Opposition lawmakers and economists, including former central bankers, have described it as fiscally irresponsible and expressed concerns that it will increase inflationary pressures in the Thai economy.
The rollout of the payments has also been delayed by disagreements over how the government would pay for the stimulus – in particular, whether the traditionally fiscally conservative country would borrow money to fund it. (In the end, Srettha’s government decided to avoid borrowing by spreading the costs out over the next two budgets: 165 billion baht from the budget for the 2024 fiscal year, which will end on September 30, and the remaining 285 billion baht from the 2025 fiscal year.)
However, after her election by parliament on August 16, Paetongtarn affirmed that Pheu Thai would continue with the program. Crucially, the scheme also received the strong backing of her father, former Prime Minister Thaksin Shinawatra, who despite holding no official government role, remains a key figure within the Pheu Thai party. “We need to stimulate the economy as our country has grown slowly for a long time,” he said in a speech in Bangkok on August 22. The following day, the king endorsed a budget appropriation of 122 billion baht to fund the scheme.
The idea that part of the stimulus would be distributed in cash, rather than via the buggy and overburdened Thang Raj (“government way”) App, has already been suggested in local media reports. On August 22, the Bangkok Post quoted one source as saying that funds would “be distributed in cash to vulnerable people first” via welfare cards, given that many potential beneficiaries may not be able to access the digital wallet due to a lack of internet connection or access to smartphones.
As Reuters reported yesterday, “it was not immediately clear how much of the budget for the program would be distributed in cash.” Paetongtarn added that the details had not yet been finalized and would be announced to parliament in due course.