Thai government considers borrowing to fund digital wallet scheme

The Thai government will consult with the Council of State to clarify whether it can borrow 172.3 billion baht from the Bank for Agriculture and Agricultural Cooperatives (BAAC) to partially fund its digital wallet scheme. This decision was made at a coalition party meeting held yesterday where the implementation of the Pheu Thai Party’s proposed 500-billion-baht (US$13.6 billion) scheme was discussed.

Prime Minister Srettha Thavisin confirmed the agreement, stating that all issues, such as the BAAC’s authority, would be referred to the Council of State. However, the 62 year old Thai PM declined to expand on this or answer the reporter’s queries, instead, deferring to the Deputy Finance Minister, Julapun Amornvivat.

Responding to queries about the scheme’s launch date, Julapun said that they were waiting for confirmation on the readiness of the scheme’s operating system. He emphasised the importance of this aspect as it pertains to the efficiency and security of applications, and personal and sensitive data.

He remained confident that the timeline for registering eligible individuals in the third quarter of the year and disbursing the digital money in the fourth quarter could still be met.

The scheme targets individuals aged 16 and above who earn less than 70,000 baht (US$1,900) monthly. The government plans to provide 10,000 baht (US$270) in digital currency to be spent at local shops, anticipating this grassroots economic stimulus will generate considerable economic returns.

Julapun recognised that the government has yet to gain approval from the BAAC board to borrow the 172.3 billion baht (US$4.67 billion). He projected that this might occur in October.

Digital wallet

The digital wallet scheme will be funded by three sources: 152.7 billion baht (US$4 billion) from the 2025 fiscal year budget, 175 billion baht (US$4.75 billion) reallocated from the current fiscal year’s budget, and the 172.3 billion baht loan from the BAAC, Julapun said.

“We have four to five months left to assure all parties about the legality of the digital wallet scheme by consulting with the Council of State on any doubts raised about it.”

In response to concerns about the BAAC’s liquidity, if it lends such a large amount, Julapun assured that the bank has sufficient liquidity. He also addressed the bank labour union’s worries about the financial security impact, promising that staff benefits would not be compromised.

He reminded that the government holds all BAAC shares and strategies would be implemented to maintain sufficient liquidity, reported Bangkok Post.

Government spokesman Chai Wacharonke believes the scheme will stimulate the economy for at least three to four years. He suggested that the economy could grow an additional 1.2% to 1.8% due to the scheme, as digital money is expected to multiply by 3.2 to 3.5 times.