Thailand Gets to Work on $14 Billion Stimulus to Spur Growth
(Bloomberg) -- Thailand began signing up millions of beneficiaries for a cash handout program, which Prime Minister Srettha Thavisin is counting on to revitalize growth in Southeast Asia’s second-largest economy.
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About 13.5 million people enrolled for the payout by 5 p.m. local time through a state-controlled application called “Tang Rath” that can be downloaded on smartphones. An estimated 50 million Thais 16 years and older are eligible to receive 10,000 baht ($280) each under the so-called digital wallet in the fourth quarter. The enrollment will be open until Sept. 15.
Authorities expect the stimulus plan to help lift Thailand’s growth rate by as much as 1.8 percentage points — a big jump for an economy that’s expanded at less than 2% pace on average in the past decade. The central bank, however, sees a more modest contribution of 0.9 percentage point to gross domestic product for the whole program.
The handout is also crucial to the fortunes of the ruling coalition as it aims to please voters battling high cost of living and the highest household debt in Southeast Asia. The multiplier effect of the largesse will fire up consumption, revive manufacturing and spur more investments, according to Srettha, who’s predicted a “whirlwind” impact on the economy that’s lagged the growth rate of its regional peers in the past decade.
The cash giveaway was originally intended for early 2024, but was delayed by wrangling over how it would be funded. Lawmakers on Wednesday passed an additional 122 billion baht of spending this fiscal year to help partly fund the project.
The stimulus will spur spending and circulation of money from the grassroots upward, government spokesman Chai Wacharonke said in a statement on Wednesday. It will also help ease the cost of living and lay the foundation for a digital economy in the future, he said.
Srettha’s administration originally expected to spend about 500 billion baht on the stimulus as there are 50.7 million people eligible for the program. But officials have since said they only expect a take-up rate of at most 90%, lowering the cost to about 450 billion baht.
(Updates with registration numbers in second paragraph.)
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