Thailand to launch $12.4 billion digital cash scheme to boost local economy
Thailand is set to roll out what was initially a controversial $13.8 billion digital cash handout program to stimulate its sluggish economy. Prime Minister Srettha Thavisin announced that eligible businesses and individuals could register for the program, dubbed the Digital Wallet, starting August 1, per AP News.
Originally announced in April, the plan aims to distribute 10,000 baht (approximately $275) to 50 million Thai citizens, previously totaling about $13.8 billion. However, Deputy Minister of Finance Julapan Amornvivat, during a press conference on July 15, stated the costs had dropped to $12.4 billion as 10% of users had not utilized previous handouts. As Bloomberg reported, this digital currency is intended to be spent at local establishments over six months.
The handouts target adults earning no more than 70,000 baht ($1,890) per month and less than 500,000 baht ($13,500) in their bank accounts. AP News confirmed that the program will be financed through a combination of the 2024 and 2025 budgets, with some funding from the state-owned Bank for Agriculture and Agricultural Cooperatives.
Beneficiaries must spend the funds within their local communities, and purchases of alcohol, cigarettes, fuel, services, and online transactions are prohibited. The World Bank projects that Thailands GDP growth will rise from 1.9 percent in 2023 to 2.4 percent in 2024.
Despite the governments optimism, the program has faced criticism from economists who question its effectiveness in fostering sustainable economic growth. Concerns about the programs impact on public debt and the fiscal deficit have been raised. As Bloomberg noted, the plan has been met with skepticism regarding its long-term benefits.
The implementation of the Digital Wallet scheme marks a significant economic policy move for Thailand, which is grappling with sluggish growth.
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