Thai government's digital wallet handouts to jumpstart economy - Analysts

BANGKOK - The Thai government's digital wallet scheme, which is set to spend 500 billion baht (US$13.68 billion) in cash handouts, is seen as a key tool to jumpstart the Southeast Asian country's sluggish economy, analysts at state-owned Krungthai Bank said.

Thai Prime Minister Srettha Thavisin said on Wednesday that the ruling Pheu Thai Party's flagship policy will be rolled out in the final quarter of this year. About 50 million Thais are eligible to receive 10,000 baht (around US$275) each via a digital wallet to spend in their neighbourhood within six months, reported Xinhua.

According to the Krungthai Compass Research Centre, the Thai economy has been experiencing consistently lower-than-potential growth rates, attributed to the sluggish recovery of trading partner economies and domestic purchasing power.

To support the recovery of vulnerable domestic sectors, the digital wallet scheme is viewed as a "quick-win" measure to broadly facilitate domestic recovery and enhance confidence in Thailand's economic expansion, the analysts said in a statement.

The handout scheme could further integrate the informal economy into the formal sector. Given that the kingdom's informal economy accounts for a significant 48.4 per cent of the gross domestic product, expanding towards a data-driven and digital economy is increasingly crucial, the statement said.

Srettha, who doubles as finance minister, told the Wednesday press briefing that the policy would boost the nation's growth by 1.2 to 1.6 percentage points.

Thailand's economy contracted 0.6 per cent in the final quarter of last year compared to the third quarter. In 2023, the Thai economy grew by 1.9 per cent, decelerating from 2.5-per cent growth in 2022. - BERNAMA-XINHUA