Domestic spending in Thailand slowed in late 2024, reflecting diminishing effects of cash handouts. Private consumption and investment declined, while government stimulus aims to support recovery amid rising household debts.
Domestic Spending Slowdown
Domestic spending in late 2024 revealed a notable downturn, as the effects of the Thai government’s THB 10,000 cash handouts diminished. This initiative aimed at supporting around 14 million vulnerable individuals began in September 2023 but struggled to maintain momentum. Key economic indicators showed declines in private consumption and investment, indicating a broader challenge for the economy amidst rising household debts.
Government Responses and Expectations
In early 2025, the government introduced several measures to stimulate spending, including personal income tax deductions up to THB 50,000 and financial transfers to elderly citizens. These actions are designed to provide a short-term boost in private consumption, which is expected to grow at a reduced rate of 3.0%, down from 4.8% in 2024, reflecting ongoing uncertainties and high household debt levels.
China’s Economic Strategies
China is also navigating economic complexities, with stimulus measures intended to address weak consumption and excess supply. Recent initiatives, such as trade-in programs for various products, aim to stimulate demand. Additionally, the government plans to support businesses through soft loans to update machinery. As global economic conditions remain precarious, China’s approach aims to stabilize growth amidst potential trade tensions, particularly with the United States.
Source : Cash handouts provide only a temporary boost to consumption