Pheu Thai Party’s digital handout scheme could boost Thailand’s GDP by 3%
The Pheu Thai Party‘s proposed digital handout scheme, requiring around 500 billion baht, could potentially boost Thailand’s GDP growth by 3% in the next year, according to the Bank of Thailand. Sakkapop Panyanukul, the central bank‘s director of the economic and policy department, mentioned the digital handout contribution depends on the economic multiplier.
The 3% GDP projection uses a cash transfer model, but definitive forecasts await more digital handout scheme details. The program suggests a digital wallet with 10,000 baht for citizens aged 16 and above, spent locally within six months to stimulate the economy and aim for 5% GDP growth.
Although the August consumer sentiment index dropped due to government concerns, Sakkapop anticipates improvement once a government forms. The central bank awaits the new government’s economic policy before predicting 2024 GDP growth of 3.8%.
However, the 2023 growth forecast might be cut from 3.6% due to slower external demand and the global economic slowdown. Thai exports may decrease due to sluggish recovery in China, but internal demand and tourism remain supportive of economic expansion.
Despite rising foreign tourist arrivals, shorter trips contribute to lower spending per person. July’s economic and monetary conditions indicate ongoing recovery with increased private spending on consumption and investment, up 7.3% annually due to a lengthy holiday.
The number of foreign tourists, after seasonal adjustment, has continued to rise, bolstering service sector activities.
Foreign arrivals rose to 2.49 million in July from 2.24 million in the previous month, largely due to tourists from China, Malaysia, Europe, and Russia. However, the value of merchandise exports, excluding gold, contracted by 4.5% in July year-on-year, a decrease from a 5.9% contraction in June, as electronics and agricultural products dipped due to weaker demand from trading partners.
Kiatnakin Phatra Securities Research adjusted Thailand’s 2023 growth forecast from 3.3% to 2.8% after a weaker second quarter. They also revised the 2024 projection from 3.6% to 3.3%, citing external factors that could impact exports and tourism.
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