Thailands ...
Thailands Digital Wallet Scheme Aims to Boost Economic Growth
Thailand has launched an ambitious digital wallet scheme designed to stimulate economic growth and enhance household purchasing power. The initiative provides eligible Thai citizens with a 10,000 baht (approximately $275) digital handout, aiming to revitalize the nation's economy in the post-pandemic era.
The scheme, a flagship policy of the Pheu Thai party under Prime Minister Paetongtarn Shinawatra, was introduced to address the country's sluggish economic recovery following the COVID-19 pandemic. With public debt exceeding 64% of GDP, the government seeks to boost consumption at the local level, particularly among lower-income earners, and promote digitalization within the economy.
The first phase of the program commenced on September 25, 2024, targeting welfare cardholders and individuals with disabilities. Approximately 14.2 million recipients benefited from this initial rollout. The government anticipates that the scheme will increase Thailand's GDP by 1.2 to 1.8 percentage points, aiming for a 5% growth rate in 2025.
However, the initiative has faced criticism from various quarters. Economists have labeled it as costly and potentially detrimental to the nation's financial health. Opposition parties, including the Move Forward and Democrat parties, have expressed concerns over the scheme's financial implications. Sethaput Suthiwartnarueput, Governor of the Bank of Thailand, noted in April 2024 that the country's economic recovery was gaining momentum and questioned the necessity of such a substantial stimulus.
Despite these criticisms, the government remains optimistic. InnovestX, a subsidiary of Siam Commercial Bank, predicts that companies operating convenience stores, supermarkets, and hypermarkets, such as CP All and Berli Jucker, will be major beneficiaries of the increased consumer spending. Following the launch of the first phase, ATM withdrawals surged, particularly at Bank for Agriculture and Agricultural Cooperatives branches, where withdrawals increased eighteenfold.
As the digital wallet scheme progresses, the Thai government continues to monitor its impact on economic growth and public welfare, aiming to balance immediate economic stimulation with long-term fiscal responsibility.
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