Bank of Thailand advises downsizing the digital wallet scheme for financially fragile people. Government dismisses concerns. Central bank warns of fiscal burdens, credit rating downgrade, and risks to special financial institutions.
The Bank of Thailand Urges Government to Downsize Digital Wallet Scheme
The Bank of Thailand (BoT) has advised the government to limit the “digital wallet” scheme to provide the 10,000 baht benefit to only 15 million financially vulnerable individuals, rather than the initially planned 50 million. This adjustment would allow for immediate implementation at a cost of 150 billion baht, according to the BoT. The government, however, has dismissed the central bank’s recommendation, citing that there is nothing new in it.
Central Bank Warns of Long-term Fiscal Risks
The BoT argues that directing funds to the financially vulnerable group, who are likely to spend more on consumption, would stimulate the economy more effectively. They recommend implementing the scheme in phased stages to lessen the impact on fiscal stability. The BoT also cautions against the current 500 billion baht cost, emphasizing the potential long-term fiscal burden and risks of a credit rating downgrade. Additionally, concerns were raised about the designated financial institution’s liquidity problems and cybersecurity vulnerabilities in the scheme. Despite these warnings, the government remains committed to proceeding with the scheme as planned.
