Thailand to Launch Phase 2 of Digital Wallet Stimulus in January
Thailand's Pheu Thai government is set to roll out the second phase of its multibillion-dollar “digital wallet” stimulus programin January, targeting around 4 million people with a distribution of 40 billion baht ($1.16 billion). The initiative aims to further boost domestic consumption and alleviate economic challenges.
Launched in September, the program is part of a larger 450 billion baht ($13.1 billion) scheme that provides 10,000 baht ($290) to approximately 45 million Thais via a smartphone app. However, technical issues, including payment difficulties for those without smartphones, delayed the rollout. In the upcoming phase, cash payments will focus on individuals over 60, with transfers scheduled before the Lunar New Year on January 29. “We see this group as a priority and can act immediately,” said Finance Minister Pichai Chunhavajira.
The government has also proposed debt relief measures, including suspending interest and reducing principal payments for some debts over three years, alongside expanding access to financial assistance through soft loans and lower interest rates. These steps are crucial to addressing Thailand's household debt, which stands at 89.6% of GDP—among the highest in Asia—and dampens domestic consumption.
While these measures are central to Pheu Thai’s economic revival agenda, friction has emerged with the Bank of Thailand over interest rate policies. Despite political pressure, the central bank has resisted rate cuts, only recently reducing them by 25 basis points, the first since 2020.
Thailand's economy, the second largest in Southeast Asia, shows signs of recovery. GDP grew 3% year-on-year in Q3 2024, marking the fastest pace in two years. Growth forecasts project a rise from 1.9% in 2023 to 2.6% this year, supported by a rebound in tourism. By late 2024, Thailand expects over 36.7 million foreign visitors, with projections exceeding 40 million in 2025—surpassing pre-pandemic levels for the first time. Additionally, the World Bank forecasts an increase in goods exports, benefiting from global trade resilience despite China's slowdown.
With its economic focus and ambitious policies, the Pheu Thai government aims to overcome domestic challenges and restore confidence in Thailand's growth trajectory.
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