BANGKOK: Thai government’s plan to fund a US$14 billion cash handout with a special borrowing legislation got the green light from its legal adviser, clearing a key hurdle to Prime Minister Srettha Thavisin’s controversial stimulus programme.
The Council of State said it is within the government’s power to enact the borrowing bill for the cash stimulus program, Deputy Finance Minister Julapun Amornvivat told reporters on Monday.
The Council, which advises the administration on legal matters, also said the government must ensure that the legislation comes in the wake of an economic crisis that warrants such measures, according to Julapun.
Julapun’s statement runs counter to a report by the Nation - a Thai media company - that the council had advised Srettha’s administration against resorting to borrowing for the program.
The green light from the Council allows Srettha’s government to proceed with the plan to give out 10,000 baht ($285) each to about 50 million Thais 16 years old and above starting May to turbocharge growth in Southeast Asia’s second-largest economy.
The so-called digital wallet plan could still face legal challenges from those opposed to the handout.
The move to borrow money for the program has triggered a backlash, including from Thailand’s opposition parties, some former central bankers and economists on concerns that move may widen the fiscal deficit and stoke inflation.
The premier is aiming to accelerate annual growth in Thailand that has lagged neighbors and averaged below 2% in the past decade, to 5% during his term.
Last week, the House of Representatives passed the first reading of Srettha’s $100 billion budget plan for the fiscal year through Sept. 30.
A committee tasked to oversee the cash handout program will meet soon to discuss the draft bill and plan the timeline of cash distribution, Julapun said.
- ©2024 Bloomberg L.P.
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