Thai economy to get ‘jolt’ from stimulus rollout this month, PM says

BANGKOK: The launch of Thailand’s US$13.5 billion handout programme later this month is certain to give a lift to the economy, Prime Minister Paetongtarn Shinawatra said on Tuesday (Sep 17), as her government promised more stimulus measures ahead.
The government will distribute about 145 billion baht (US$4.36 billion) or a third of the overall amount from Sep 25 to low-income earners and vulnerable groups to kick-off the vaunted stimulus drive for Southeast Asia’s second-largest economy, which grew just 1.9 per cent last year, far adrift of peers.
Less than 40 million Thais are expected to sign up to receive payments of 10,000 baht, mostly via a smartphone application, to be spent within six months in their communities.
About 14.5 million people will receive payments next week, directly to their bank accounts, according to the Finance Ministry.
“From the figures we found, the first vulnerable group that receives 10,000 baht have a high spending rate and so there will certainly be a jolt to the economy,” Paetongtarn told reporters.
The first injection will boost economic growth by 0.35 percentage points, said Pornchai Thiraveja, head of the Fiscal Policy Office.
The measure is the flagship policy of the populist Pheu Thai Party, which leads the government and is keen to boost an underperforming economy shackled by high household debt, weak spending and a slow recovery in exports, a key driver.
The central bank expects the economy to grow just 2.6 per cent this year.
Deputy Finance Minister Julapun Amornvivat said the digital aspect of the handout would continue because it was part of the government’s plan to create a digital economy, which would include a blockchain-backed payments infrastructure.
The stimulus scheme has been criticised by economists, including two former central bank governors, as being fiscally irresponsible. The government rejects that, but has struggled to find sources of funding.
The timing and method of payment of the second phase is currently under review, said Finance Minister Pichai Chunhavajira, adding there would be more stimulus measures to follow.