Finance Ministry cashes in with economic stimulus package

The Finance Ministry is preparing to unveil an extensive economic stimulus package for review by a committee led by Prime Minister Paetongtarn Shinawatra.

The announcement was made by Deputy Finance Minister Julapun Amornvivat, who indicated that the proposal includes a 10,000-baht (US$290) cash handout distributed via a digital wallet. This initiative is aimed at stimulating economic activity to bolster growth throughout the upcoming year.

Describing the package as a new year’s gift to the Thai populace, Julapun highlighted tax measures and debt resolution strategies as key components. These are intended to provide debtors with much-needed relief and improve access to financial support through soft loans and reduced interest rates. However, specific details of the stimulus initiatives remain under wraps as discussions are ongoing and some elements have yet to be finalised.

Other government ministries are also expected to present their stimulus proposals to the economic stimulus policy committee. The objective is to establish a unified direction for economic growth and determine optimal timing and implementation strategies for each initiative. Industry-targeted measures are also anticipated to be part of the final package.

Despite expectations of robust economic growth in the last quarter of this year, Julapun acknowledged that certain sectors, such as lending services for pickup trucks and property, still require assistance. The Cabinet recently approved a 55 billion baht (US$1.59 billion) loan programme for purchasing, building or renovating homes at low interest rates. The decision to extend the transfer fee reduction, set to expire by the year’s end, remains pending.

The new loan scheme is set to replace the Happy Home Housing Loan Project and the Happy Life Loan Project, both of which received positive consumer responses. Julapun noted that the budget for these economic stimulus initiatives would be sourced from various avenues, not solely reliant on the annual budget. A significant 180 billion baht (US$5.2 billion) has been earmarked for the digital wallet scheme.

The government is also focusing on the elderly as the target demographic for the second phase of the digital wallet initiative. Finance Minister Pichai Chunhavajira pointed out that the elderly face limited employment prospects compared to other age groups but the criteria might be expanded to include individuals aged 50 and above. The smaller size of this demographic group necessitates a less extensive budget allocation.

Economic stimulus

Deputy Finance Minister Paopoom Rojanasakul previously mentioned that the age range is under consideration for the next phase of the 10,000 baht digital wallet programme. He indicated that fewer individuals might qualify for the payment in this phase, with disbursement potentially occurring at the end of this year or early next year, reported Bangkok Post.

This comprehensive package from the Finance Ministry is expected to address short-term, medium-term, and long-term economic measures, all packaged as New Year’s gifts. The first phase of cash handouts to vulnerable groups has already shown positive effects, particularly in the fourth quarter, where the GDP is projected to grow by 4.3 to 4.4%.