Thailand will consider all sources of funding for 500 billion baht handout scheme

THAILAND will consider all sources of funding for the government’s signature 500 billion baht (S$18.3 billion) handout scheme and ensure that public debt remains at manageable levels, a senior official said on Friday (Apr 5).

The ‘digital wallet’ handout plan, a key campaign promise of the ruling Pheu Thai party, entails giving 10,000 baht to 50 million Thais to spend in their communities, but has been delayed over funding concerns.

The giveaway has been delayed to the fourth quarter this year as the government scrambles to find ways to fund the scheme. This week Cabinet approved widening the deficit for the 2025 fiscal year budget by 152.7 billion baht.

The plan, however, has come under fire from experts who say it is fiscally irresponsible and fixing Thailand’s economy requires addressing structural problems.

When asked about the deficit and public debt impacting the country’s credit rating, Deputy Finance Minister Krisada Chinavicharana said it was not a problem.

“The country’s position is strong ... public debt will not exceed 70 per cent.”

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Prime Minister Srettha Thavisin’s government has also pressed the Bank of Thailand to cut interest rates to stimulate growth.

“Monetary and fiscal policy must work together,” said finance ministry permanent secretary, Lavaron Sangsnit, adding that the central bank must explain why rates have to remain high.

The central bank has so far resisted government pressure to ease policy, holding the key interest rate at 2.5 per cent in February, the highest in more than a decade, in a split vote. Its next rate review is on Apr 10. REUTERS