Thai government’s 500-billion-baht digital wallet scheme launches this quarter

Prime Minister Srettha Thavisin announced yesterday that the government’s 500-billion-baht digital wallet initiative will be launched in full swing in the fourth quarter to stimulate economic growth. This flagship policy of the ruling Pheu Thai Party plans to distribute 10,000 baht to 50 million Thai citizens for spending within their local communities over six months.

PM Srettha, who also serves as the finance minister, asserted during a briefing that the policy would enhance GDP by 1.2 to 1.6%. He emphasised the need for substantial stimulus measures for the economy, which may have seen less than 1% growth in the first quarter following a 1.7% annualised growth in the final quarter of 2023.

According to the 62 year old Thai prime minister, the handout scheme will provide a cash injection to help alleviate the economic strain on locals due to the increasing cost of living, while also improving the living standards of vulnerable groups and farmers. He added that the initiative will bolster local economies, fostering self-reliance in more communities. Additionally, the scheme will support the development of digital technologies and innovation.

“Today, the government is delighted to announce that the 10,000-baht (US$270) digital wallet handout scheme, which is the government’s flagship policy, will officially begin. The government has been trying its utmost to overcome obstacles and limitations until this day when it has acted on its promise. The policy is in line with the law and strictly complies with financial discipline.”

Deputy Finance Minister Julapun Amornvivat clarified that the digital wallet scheme, requiring 500 billion baht (US$13 billion), will be funded through three sources. Of the total, 152.7 billion baht (US$4 billion) will be sourced from the 2025 fiscal year budget, while an additional 172.3 billion baht (US$4.7 billion) will be borrowed from the Bank for Agriculture and Agricultural Cooperatives’ budget for the 2025 fiscal year under Section 28 of the State Fiscal and Financial Disciplines Act.

This sum will be allocated to 17.23 million farmers. The remaining 175 billion baht (US$4.8 billion) will be derived from the reallocation of the 2024 fiscal year budget.

Digital wallet

Registration for the handout will commence in the third quarter and the funds can be spent in the fourth quarter. A subcommittee under the Digital Wallet Policy Committee will monitor any potential breaches of the scheme’s criteria and other related laws. The Finance Ministry will present the scheme for Cabinet approval this month, according to Amornvivat.

Finance’s permanent secretary, Lavaron Sangsnit, insisted that the scheme will be funded under the Budget Act and the State Fiscal and Financial Disciplines Act. Thais aged 16 and over, earning less than 70,000 baht (US$2,000) a month and with less than 500,000 baht (US$3,600) in their bank accounts, are eligible to receive the 10,000-baht handout. Based on these conditions, approximately 50 million individuals will be eligible, a decrease from the initial estimate of 56 million.

The handout is strictly for purchasing food and consumer goods. It cannot be used for online purchases, cigarettes or alcohol, cash vouchers, or valuable items like diamonds, gems, or gold. Neither can it be used for debt repayment, utility bills, fuel, natural gas, or tuition fees.

The funds must be spent within the district where the recipient’s home is registered. Despite facing criticism from some economists and former central bank governors, who deemed the scheme fiscally irresponsible, the government has been striving to finance the initiative without adding to the public debt, reported Bangkok Post.

Former election commissioner, Somchai Srisutthiyakorn, criticised certain aspects of the scheme yesterday via Facebook. He pointed out the government’s lack of clarity regarding the interest rate and repayment period for the 172.3-billion baht loan from the BAAC.