Tuesday, June 18, 2024

Thailand to add $3.4 billion to budget to fund cash handout plan

Thailand plans a $3.4 billion budget to stimulate the economy with a digital wallet program giving 10,000 baht to 50 million citizens. Critics warn of inflationary risks and fiscal impact.

Thailand’s Stimulus Budget Plans

Thailand is gearing up to implement a supplementary budget of up to $3.4 billion to boost state spending and revitalize the economy. Among the initiatives planned is a digital wallet program that will provide 10,000 baht to approximately 50 million Thai citizens in the fourth quarter.

The Criticisms and Challenges

  • The decision to increase the budget for cash stimulus has faced criticism due to concerns about potential inflationary impact and risks to fiscal consolidation.
  • The budget deficit is expected to widen as the government plans to finance the supplementary budget through a combination of wider deficits, additional revenue collection, and borrowing spread out over several years to facilitate the digital wallet program.

Government’s Approach and Economic Impact

The Thai government’s objective is to combat lower-than-expected economic growth and prevent a technical recession through the stimulus measures. Despite criticisms, the government prioritizes the cash stimulus to ensure timely public expenditure and economic support. By spreading out borrowing to minimize the impact on the bond market, the government aims to manage the budget deficit effectively to support economic recovery and stability.

Source : Thailand to add $3.4 billion to budget to fund cash handout plan

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