The first phase of Thailand’s “digital wallet” economic stimulus scheme started last week, following the Pheu Thai Party’s main election promise.
Former Thai Prime Minister Srettha Thavisin actively promoted the scheme during his 11 months in office. He claimed that giving consumers money would help boost the country’s GDP.
The overall scheme involves paying 10,000 baht ($280) to 45 million citizens to spend locally to stimulate the economy. On 25 September, the government launched the first phase of the programme, under which the amount would be distributed in cash to the bank accounts of Thai social security cardholders and citizens with disabilities.
The digital wallet scheme is estimated to cost the Thai government $14 billion. However, economists debate whether it will be effective in stimulating consumer spending or whether it is just a populist policy.
Ilada Pitsuwan, a Thailand-based economic journalist, believes there are pros and cons to the distribution.
For political agendas, it is quite clear that after the introduction of the 10,000-baht cash handouts, the popularity of PM Paetongtarn Shinawatra, rose to the top, according to a NIDA poll.
The People’s Party, a regrouping of the disbanded Move Forward Party, remains the most popular political force in Thailand, according to a recent poll. Ilada said the economic push could help the Pheu Thai Party’s popularity in the short term. In the long term, however, the Thai people need structural changes in the country.
The current challenge of the Thai economy is the influx of cheap Chinese goods that could threaten Thai manufacturing in the long term. It would be beneficial if this policy continues to drive Thailand’s economic growth, but if not, the results of this huge consumption may not benefit Thai manufacturers and may instead spread outside the country as well.
