BANGKOK: Thailand’s cabinet approved a cash handout plan totaling 145.6 billion baht (US$4.4 billion) that will benefit millions of poor and help stimulate South-East Asia’s second-largest economy.
The government will start transferring 10,000 baht each to an estimated 14.6 million beneficiaries from Sept 25, Finance Minister Pichai Chunhavajira told a briefing after a cabinet meeting in Bangkok on Tuesday (Sept 17). The beneficiaries include 12.4 million state welfare cardholders and 2.15 million people with disabilities, he said.
The stimulus is the centerpiece of new Prime Minister Paetongtarn Shinawatra’s (pic) efforts to revive an economy that’s grown roughly average 2% a year for the past decade, less than half the pace of neighbouring Indonesia. The payout will lift growth by 35 basis points this year, according to an official statement.
The cash dole pales in comparison to the promise to extend the benefit to about 45 million adult Thais through a so-called digital wallet programme by Paetongtarn’s predecessor Srettha Thavisin, who was ousted last month by a court for an ethical violation. The new leader has chosen to prioritize the poorest sections of the society first, while delaying the benefit to other eligible beneficiaries to sometime next year.
The main election pledge of the ruling Pheu Thai party, the digital wallet was dogged by controversies over the government’s shifting stance on how to finance it. After initially proposing to cover about 55 million Thais and financing it through state budget, Srettha decided to exclude affluent Thais and fund it through a one-off borrowing. But potential legal challenges and warnings from the nation’s anti-graft agency prompted the government to rework the funding options.
Paetongtarn, who took office earlier this month, faces the challenge of shoring up growth in an economy stifled by near-record household debt, influx of cheap products from China and weak exports.
The funding for the handout will come from the 122 billion baht supplementary budget and part of the annual budget for the fiscal year ending this month, Pichai said. A second phase to cover those registered for the digital wallet but not entitled to the payout this month may be considered later, Pichai said without setting a timeframe.
The smaller disbursements have reduced concerns about the cost to the economy, which expanded 2.3% in the second quarter from a year earlier. Paetongtarn will chair a new committee to oversee initiatives to stimulate the economy, according to Deputy Finance Minister Julapun Amornvivat. - Bloomberg
