Thai PM confirms ‘digital wallet’ to continue, flags cash payments

Thai Prime Minister Paetongtarn Shinawatra has reaffirmed that her new government will continue with the controversial stimulus program introduced by recently ousted Prime Minister Srettha Thavisin.

However, yesterday Paetongtarn spoke to reporters about a new change to the 450 billion baht ($13.1 billion) “digital wallet” program, saying part of the stimulus package will be distributed in cash rather than digitally, according to 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 resignation, Srettha’s government had started enrolling eligible Thais in the stimulus program, through which they would receive one-time grants of 10,000 baht ($292), expected to be distributed in the fourth quarter of the year.

The ‘digital wallet’ program, expected to benefit about 45 million people, was core to the Pheu Thai Party’s goal to boost Thailand’s economy, which has been growing at a sluggish pace since the COVID-19 pandemic to breathe new life into. In January, Srettha told reporters that Thailand’s economy is “not doing well and is in crisis” and his government promised that the payments would deliver a stimulus shock to the economy. Under the scheme, about 45 million Thais would receive payments of 10,000 baht through a smartphone application, which they could spend on site for six months.

However, after Srettha’s fall, it was unclear whether the new government would continue with the program, which has been controversial since Pheu Thai unveiled it ahead of last year’s general election. Opposition lawmakers and economists, including former central bankers, have labeled the situation as fiscally irresponsible and expressed concern 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 measures — particularly whether the traditionally fiscally conservative country would borrow money to finance them. (Ultimately, the Srettha government decided to avoid borrowing by spreading the costs over the next two budgets: 165 billion baht from the budget for the 2024 financial year, which ends on September 30, and the remaining 285 billion baht from the 2025 financial year. .)

However, following her election by parliament on August 16, Paetongtarn confirmed that Pheu Thai would continue with the program. Crucially, the plan also had strong support from her father, former Prime Minister Thaksin Shinawatra, who despite not serving in an official government role remains a key figure within the Pheu Thai Party. “We need to stimulate the economy as our country has been growing slowly for a long time,” he said said in a speech in Bangkok on August 22. The next day, the king approved a budget allocation of 122 billion baht to finance the plan.

The idea that some of the stimulus would be distributed in cash, rather than through the buggy and overloaded Thang Raj app (“government way”), has already been suggested in local media reports. The Bangkok Post was published on August 22 one source quoted saying that the money would be “distributed first in cash to vulnerable people” through social security cards, as many potential beneficiaries may not have access to the digital wallet due to a lack of internet connection or access to smartphones.

Like Reuters reported yesterday“It was not immediately clear how much of the program’s budget would be distributed in cash.” Paetongtarn added that the details have not yet been finalized and will be announced to parliament in due course.