Thai government to finance digital wallet scheme with 500 billion baht loan

The Thai government has plans to secure a loan of 500 billion baht to finance a digital wallet scheme, revealed Prime Minister Srettha Thavisin.

This digital wallet scheme is targeted towards Thai citizens who are 16 years and older, earning less than 70,000 baht per month with less than 500,000 baht in bank deposits.

The 61 year old Thai prime minister, during a press conference, stated that this digital wallet scheme could potentially benefit around 50 million individuals, a slight decrease from the initial target of 56 million.

Those earning more than 70,000 baht per month with less than 500,000 baht in bank deposits, and those earning less than 70,000 baht per month with more than 500,000 baht in bank deposits will be ineligible for this scheme.

The Thai PM highlighted the urgent need for an economic stimulus in the country, citing that over the past decade, Thailand’s GDP has only seen an average annual increase of 1.9%. Household debt has also surged from 76% in 2012 to 91.6% this year. With the manufacturing sector also experiencing a decline, job losses have been significant.

“The economy is in dire need of a boost, otherwise, we are looking at a worsening recession.”

Economic boost

To tackle this, the government plans to inject 600 billion baht into the economy – 500 billion from the digital wallet scheme and an additional 100 billion baht fund to enhance the country’s economic potential. The digital wallet policy aims to increase cash flow and boost spending over six months post-launch. The handout is expected to commence in May, three months later than initially planned.

PM Srettha emphasised that the use of digital money would be limited to the purchase of food and consumer goods. It cannot be used for online purchases, buying cigarettes or liquor, cash vouchers, diamonds, gems, or gold, or for the payment of debts or utility bills.

The Bangkok-born PM also spoke of a new 100 billion baht fund that will be utilised to enhance Thailand’s competitiveness in various sectors, potentially including investments in new technologies and human resource development, reported Bangkok Post.

“This is not a welfare scheme for the needy, but an economic boost through increased spending with the government and the people working together to revive the economy.”

In terms of raising funds for the programme, the prime minister revealed that a bill proposing a special loan of 500 billion baht is the most practical approach. The draft bill will be submitted to the Council of State this year, checked for legal issues, and forwarded to Parliament early next year.

The additional 100 billion baht for economic projects will be sourced from state budgets, the prime minister added.

The opposition Move Forward Party’s deputy leader, Sirikanya Tansakun, responded to the government’s plan, stating that there are no other options available, but there is a risk that the Constitutional Court might rule against the bill due to lack of justification for an urgent handout.