The first phase of Thailand’s “digital wallet” economic stimulus plan was launched last week, following a key campaign promise of the Thai Contribution Party for the 2023 Thai general election.
Thailand’s former prime minister, Suretha Thabisin, pushed for the plan during her 11 months in office, arguing that giving money to consumers would help Thailand’s GDP grow.
The overall plan calls for payments of 10,000 baht ($280,000) to Thailand’s 45 million people to spend locally to boost Thailand’s economy.
Millions of people registered despite delays in the start of the scheme and initial errors in the application system for handouts.
On September 25, the government launched the first phase of the program, distributing 10,000 baht in cash to the bank accounts of Thai welfare card holders and disabled citizens.
The plan is estimated to cost the Thai government $14 billion. There is debate among economists as to whether it has the effect of stimulating consumer spending or is simply a populist policy.
Political maneuvering or sound economic policy?
Irada Pitsuwan, a business journalist from Thailand, said there were pros and cons to the handout.
“According to the NIDA poll, when it comes to the political agenda, it is clear that Prime Minister Petuntarun Shinawatra’s popularity rose to the top after the introduction of the 10,000 baht cash transfer,” she told DW.
“Cash will be put into the hands of Thais and it will create a tornado of spending,” Petonthan said at an event launching the program.
The government wants the cash to be used to benefit local shops and manufacturing. Image: Makoto Honda/picture-alliance/Zoonar
However, the latest survey shows that the People’s Party, which re-formed the disbanded Forward Party, remains Thailand’s most popular party.
Mr Irada said this reflected that while economic stimulus could help the Thai Contribution Party’s popularity in the short term, in the long term Thai people needed structural changes in the country. Ta.
He added that there were concerns that the plan would not bring the promised economic benefits to domestic production.
“The current challenge for the Thai economy is the influx of cheap Chinese products that could threaten Thailand’s manufacturing industry in the long term,” she said.
“It will be beneficial if this policy continues to drive Thailand’s economic growth, but otherwise the consequences of this huge consumption will not benefit Thai manufacturers and may even spill over abroad.” Irada added.
Criticism from opposition parties
Thai People’s Party official Sirikanya Tansakul argued that the digital wallet plan is not the same as what the Thai Contribution Party originally promised because cash is being distributed.
“They have just launched a new campaign to provide cash transfers of $10,000 per person to vulnerable people, which they promised during the campaign,” he said at an event at the Foreign Correspondents Association of Thailand on Thursday. It’s not a digital wallet.”
“If this is a stimulus package, I don’t think it will be effective,” Sirikanya said at the event, adding that the expected stimulus package would only boost gross domestic product (GDP) by 0.35%. .
“It’s not a very effective way to stimulate the economy to begin with. The government has run out of options for its people,” Sirikanya said.
Sirikanya said the plan could be a budget burden for the next two cycles and that the total cost of $14 billion was “too much” for a cost-of-living relief plan.
“If this continues, it will put a financial burden on the country and the economy,” she added.
The People’s Party hopes to form a government if it wins Thailand’s next election in 2027.
The party’s predecessor, the Forward Party, won a popular vote in 2023, but was unable to form a government and was ultimately dissolved by court order in August 2024.
Thailand aims for further growth
Lawmakers are focused on improving the kingdom’s economic outlook, as Thailand’s economy is not growing as quickly as government officials had hoped.
The World Bank’s Thailand Economic Monitor recently predicted GDP growth of 2.4% in 2024, slower than Thailand’s regional countries.
This is why Thailand is also focusing on promoting international tourism.
Chinese tourists are greeted by former Prime Minister Suretta Thavisin after arriving in Bangkok without a visa. Image: Sakchai Lalit/AP/picture Alliance
The government recently relaxed the 60-day entry visa requirement for visitors from 93 countries. It has also launched the Destination Thailand Visa, which allows digital nomads, freelancers and remote workers to live, work and travel in Thailand for five years.
Thailand also hopes to prosper from the economic benefits brought by tourism in 2019, the peak year for domestic tourism. Tourism accounted for 11.5% of the country’s total GDP in 2019, with a record 39 million visitors. Saudi Arabia expects 36 million visitors by the end of 2024, and a record 41 million visitors in 2025.
Political scientist Tithinan Ponsdilak says Thailand needs to turn to digitalisation.
“I think we’ve moved on now. We need to talk more about digitization, the digital economy, AI, machine learning and education reform,” he told the Foreign Correspondents Association of Thailand in August.
“Thailand missed out on semiconductor innovation, the high-tech boom, and now it’s missing out on the AI explosion. The reason for that is because of the domestic political situation. I think Thailand is being held back,” he added.
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Editor: Wesley Rahn
