Thai PM says economy needs a boost, weighs funding options for $13.7 billion handout plan

BANGKOK (Reuters) – Thai Prime Minister Srettha Thavisin said on Wednesday the economy had problems and needed a boost from a signature handout scheme worth 500 billion baht ($13.7 billion), for which he was weighing options for funding.

Concerns over the funding have dogged the controversial “digital wallet” scheme that entails transferring 10,000 baht ($275) to 50 million Thais to spend within six months. Some experts have called it fiscally irresponsible.

The government said this week it expected to distribute the money in the fourth quarter of the year, delaying it beyond a previous target of May.

Srettha said the government had assigned the finance ministry and the Budget Bureau to consider possible funding sources for the scheme, in addition to a borrowing bill.

“The economy has problems and we have to boost the economy as growth has been low over the past 10 years,” he said.

The economy unexpectedly shrank in the final quarter of 2023, with full-year growth at 1.9%, less than 2.5% growth in 2022.

The state planning agency has cut its 2024 growth outlook to between 2.2% and 3.2% from the 2.7% to 3.7% earlier projected.

The funding source would be discussed at the next meeting on April 10, Srettha said, during which details of the plan would be finalised.

It is expected that the government could finance the scheme with the fiscal budget. The budget for the 2024 fiscal year was approved in the past few days by the lower and upper houses.

The government has tried to seek a borrowing bill to finance the handout programme but faced difficulty justifying the legality of such a move that would normally be valid only in an economic crisis.

Srettha has said the economy is in crisis and at a “critical” stage, requiring urgent stimulus measures central bank governor has disagreed with that but said the economy faced slower-than-expected growth and structural issues.

$1 = 36.41 baht)

(Reporting by Orathai Sriring and Satawasin Staporncharnchai; Editing by Martin Petty)