Thailand launched its first phase of a $14 billion plan to revitalize the economy.
The “digital wallet scheme” is a financial aid initiative that will eventually cover 45 million citizens who each receive 10,000 Baht.
This direct cash injection is believed to drive spending by consumers and create economic momentum.
The first round of cash payments will be made to 14,5 million people with disability and welfare cards by the end the month.
Speaking at the launch of the program, Prime Minister Paetongtarn Shinawatra expressed his optimism regarding its potential impact.
Thais will receive cash and spend it in a flurry.
Spending to boost economic growth is the government’s priority
The original intention of the digital wallet was to be operated via an app on smartphones, which would allow recipients to use their funds in local communities for six months.
The government wants to boost economic growth, so despite initial plans for the technical aspects of the program, it begins by giving cash directly.
The prime minister stressed in her speech that “there will be additional stimulus measures and we will continue to move forward with our digital wallet policy.”
The program, designed to kickstart Southeast Asia’s second largest economy which was projected to increase by 2,6% this year after a modest 1,9% growth last year, has been met with significant opposition.
Economists question fiscal responsibility
Even though the Thai government is firm in its stance regarding the stimulus plan two economists who were former central bank governors have expressed concern that it’s fiscally unsustainable.
The impact of the massive handouts on the national economy is a concern for critics, particularly as the government struggles with adequate funding.
The administration, however, has remained firm in its decision. It views the program as an essential step for the country to improve the economic growth that has been lagging behind the other countries of the region.
Thailand has re-examined its tourism policy amid concerns about revenue
The newly appointed Minister of Tourism, Sorawong Thienthong, has also announced that he plans to introduce a tax on tourism which was previously halted by the Prime Minister Srettha Tavisin.
This tax will help the government reach its goal to increase tourism revenues to 3 trillion baht by this year.
Thienthong said:
The tourism tax is a good thing for the industry, as the money can be spent on infrastructure development and tourist attractions. It also ensures the safety of tourists.
The minister did indicate that the readiness of the system to collect the fees must still be evaluated before a date is finalized.
The Thai government has adopted two strategies to boost the domestic economy and stimulate spending.
The post Thailand launches $14 billion digital wallet program to boost the economy could be updated as new information becomes available
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