Prime Minister Srettha Thavisin announced on Wednesday that the government’s digital wallet initiative, valued at 500 billion baht, is set to be launched with full force in the fourth quarter to stimulate economic growth.
The Pheu Thai Party’s leading policy aims to distribute 10,000 baht each to 50 million Thais for spending within their communities over a six-month period.
Serving also as the finance minister, Mr. Srettha explained in a briefing that this policy is expected to raise the GDP by 1.2 to 1.6 percentage points.
He highlighted the need for significant stimulus efforts, noting that economic growth might have barely reached 1% in the first quarter, following a 1.7% annual growth in the final quarter of 2023.
Mr. Srettha pointed out that the scheme is designed to alleviate the financial burden on locals grappling with increased living costs, while also enhancing the livelihoods of vulnerable groups and farmers.
He emphasized that the initiative would bolster local economies, promoting self-sufficiency among communities, and aid the development of digital technologies and innovations.
“Today, the government is delighted to announce that the 10,000-baht digital wallet handout scheme, which is the government’s flagship policy, will officially begin.
“The government has been trying its utmost to overcome obstacles and limitations until this day, when it has acted on its promise. The policy is in line with the law and strictly complies with financial discipline,” Mr Srettha said.
Deputy Finance Minister Julapun Amornvivat outlined that the digital wallet program, needing 500 billion baht, would be funded through three sources.
Of this, 152.7 billion baht is allocated from the 2025 fiscal year budget, and an additional 172.3 billion baht will be borrowed under Section 28 of the State Fiscal and Financial Disciplines Act from the Bank for Agriculture and Agricultural Cooperatives’ 2025 fiscal year budget, designated for 17.23 million farmers.
The remaining 175 billion baht will be redirected from the 2024 fiscal year budget, according to Mr. Julapun.
Eligible individuals can sign up for the handout in the third quarter and utilize it in the fourth quarter, he mentioned.
A special subcommittee under the Digital Wallet Policy Committee will oversee compliance with the scheme’s guidelines and related laws, Mr. Julapan added, noting that the Finance Ministry plans to seek cabinet approval for the scheme this month.
Lavaron Sangsnit, the permanent secretary for finance, assured that the funding adheres to the Budget Act and the State Fiscal and Financial Disciplines Act.
Thais 16 years and older, earning below 70,000 baht a month and with less than 500,000 baht in savings, are eligible for the 10,000-baht grant.
This eligibility criteria suggest about 50 million people will benefit, a decrease from an initial estimate of 56 million.
The grant is restricted to purchases of food and consumer goods and cannot be spent on online purchases, cigarettes, alcohol, cash vouchers, or luxury items like jewelry.
It also cannot be used for debt repayment, utilities, fuel, or tuition fees, and must be spent within the recipient’s registered district.
The government faces the challenge of funding this initiative without increasing public debt, amid criticisms from economists and former central bank governors who question the scheme’s fiscal prudence.
Former election commissioner Somchai Srisutthiyakorn criticized the scheme on Facebook, particularly questioning the lack of details on the interest rate and repayment period for the proposed 172.3-billion baht loan from the BAAC.
