Thailand govt pushes for 500-billion-baht loan to boost economy

Deputy Finance Minister Julapun Amornvivat underlined the government’s prerogative to deem the current economy as crisis-ridden, a pivotal aspect for sanctioning the 500-billion-baht loan bill to propel its digital wallet disbursement scheme. According to him, the definition of an economic crisis is subjective, hinging on individual perception.

Nonetheless, the government’s assessment paints the picture of an economy in dire need of swift stimulus measures to avert further decline.

Julapun emphasised that the state of the economy, whether in crisis or not, would unlikely impact the affluent. However, the less fortunate demographic perceives the economy to be underperforming and in a state of crisis. He attributed Thailand’s economic slump to the skyrocketing household debt, which currently stands at 90% of GDP. This has ramifications on domestic consumption, savings, and investment, leading to a stagnant growth rate over the past two decades, reported Bangkok Post.

The concern of most individuals revolves around maintaining their existence and securing funds for debt repayment. Simultaneously, the private sector is preoccupied with cost reduction to enhance debt servicing ability.

The Fiscal Policy Office (FPO) reported a meagre 1.8% GDP growth in 2023, echoing earlier forecasts by the Bank of Thailand and the National Economic and Social Development Council.

Julapun stated that the digital handout scheme would kick off as soon as the National Anti-Corruption Committee forwards its feedback on the loan bill to the Digital Wallet Policy Committee. However, due to likely delays, the scheme might not launch as planned in May, potentially resulting in a minimal stimulus effect on the economy.

As per Section 53 of the 2018 State Fiscal and Financial Discipline Act, the government is legally entitled to borrow for reasons beyond those outlined in the public debt administration law. However, the Ministry of Finance can only do so under a specifically enacted law, and in urgent situations requiring continuous action to tackle severe problems where annual appropriations cannot be allocated timely. The purpose of the loan must also be clearly stated.