Digital wallet to the rescue: PM bets on cashing in for Thailand’s economy

Prime Minister Paetongtarn Shinawatra firmly believes that the government’s policy, particularly the digital wallet handout programme, will act as a significant catalyst to regenerate the flailing economy of Thailand. This policy will be officially presented to Parliament over two days, starting tomorrow, as mandated by the constitution, before the government can begin its work.

The 38 year old Paetongtarn plans to deliver an overarching view of the government’s policy, while Cabinet ministers will provide specifics on their respective areas of responsibility. She emphasised the importance of the digital wallet programme, noting its role in economic stimulation.

“The digital wallet programme will become clear after the policy statement. I will provide an overall picture while the finance minister will explain the details. The digital wallet programme aims to stimulate the economy. If such a stimulus is still not enough, we are ready to restructure the economy to become a digital one.”

She clarified that the digital wallet is just one of several economic stimulus policies but acknowledged it as the primary one for immediate economic impact. Addressing concerns about the plan to split the 10,000-baht (US$300) payment into two parts, she argued for the need to adjust the system to ensure prompt disbursement.

“It will take some time to install the digital wallet system, but people cannot wait, so we need to make adjustments to ensure they receive the money as quickly as possible. The payments will be made in phases. Payments in tranches, along with other economic stimulus measures, will help boost the economy.”

The government has committed to distributing 145 billion baht (US$4.3 billion) in cash through the digital wallet programme to vulnerable groups and state welfare cardholders starting tomorrow. Those already registered via the Tang Rat application will receive 5,000 baht (US$150) by the end of this year, with the remaining half coming in digital currency next year if the digital wallet system is not fully operational.

Digital wallet

This scheme is central to the government’s strategy to revitalise Southeast Asia’s second-largest economy, which grew by 2.3% in the second quarter. A recent change in government following the court’s removal of Srettha Thavisin as premier has created uncertainty regarding the commencement of these stimulus measures. Paetongtarn, Srettha’s successor, confirmed last week that part of the handout would now be given in cash.

Deputy Prime Minister and Defence Minister Phumtham Wechayachai verified that the digital wallet handout scheme would be presented for Cabinet approval tomorrow. The revised government figures indicate that the 450 billion baht (US$13 billion) required for the scheme will be sourced from the budgets for fiscal years 2024 and 2025.

Approximately 140 billion baht (US$4 billion) will come from the fiscal year 2024, with about 23 billion baht (US$683 million) from the central budget and 122 billion baht (US$3.6 billion) from the additional budget for that year.

A supplementary bill to increase the current fiscal year’s budget by 122 billion baht (US$3.6 billion) to partially fund the scheme has already been passed by Parliament. Additionally, around 187 billion baht (US$5.5 billion) of the 450 billion baht (US$13 billion) will come from the 2025 central budget, leaving the scheme still about 117 billion baht (US$3.5 billion) short.

Wanwichit Boonprong, a political science lecturer at Rangsit University, noted that Paetongtarn’s policy largely continues the previous administration’s initiatives. He pointed out that several policies of the new government appear to be inspired by former Prime Minister Thaksin Shinawatra’s statements at a recent local forum, reported Bangkok Post.

Olarn Thinbangtieo, a political science lecturer at Burapha University in Chon Buri province, observed that some government policies, including the plan for an entertainment complex with a casino, were not part of their election promises.

“Many policies are similar to those proposed by Thaksin at the forum, which shows the government may have been influenced by Thaksin.”