Thailand to give 50 million people $429 each to boost economy

Srettha Thavisin was elected prime minister of Thailand last year after proposing the stimulus plan.

Thailand has unveiled the next stage of a controversial plan to give 50 million people roughly £215 ($429) each, in an attempt to boost a lacklustre economy.

The “digital wallet” scheme was a key election pledge of Srettha Thavisin, the Prime Minister. It will give 10,000 baht to all lower-income Thais aged 16 and over and is expected to cost 450 billion baht (roughly $20.5b).

The government has insisted the handouts will unleash an “economic tornado”, with Srettha suggesting the stimulus could increase GDP by as much as 1.6 percentage points. This would be a much-needed boost for an economy underperforming compared to peers in Southeast Asia.

But the policy – a campaign promise by Srettha’s Pheu Thai party last year – has proved controversial, with economists warning it is an inefficient strategy for long-term growth and lingering questions about how it will be financed.

‘Only a band-aid’

“The Thai economy is not healthy. The digital wallet policy, if enacted, will only be a band-aid on Thailand’s structural economic problems,” said Mathis Lohatepanont, a political analyst. He pointed to a Bank of Thailand report in May that warned that exports, manufacturing and private investment were all down.

“Thailand will require longer-term economic policy-making that orients the economy towards innovation-driven growth to escape its current state of stagnation,” he told the Telegraph.

But the Thai government this week announced it is pressing on with the plans, with registration for eligible individuals and businesses to begin on August 1.

The scheme will give digital money to adults who earn less than 840,000 baht ($32,400), with less than 500,000 baht ($22,800) in savings and is expected to come into effect towards the end of the year. The Commerce Ministry said it would unveil limitations on how the money can be spent next week.

“The digital wallet proposal is controversial as it is hugely expensive and it remains unclear how it will be funded, despite recent announcements,” Peter Mumford, head of the Eurasia Group in Southeast Asia, told the Telegraph. “There is also uncertainty over the technology that will be used.”

But he added: “Srettha, and Pheu Thai more broadly, remains keen to deliver this key election campaign pledge and believes the party will be punished by voters at the next election if it fails to do so.”