BANGKOK (AP) — Thailand’s prime minister said Monday that eligible businesses and individuals can register for digital cash handouts starting in August, a controversial program that will cost billions of dollars and is intended to boost the lagging economy.
The government announced the much-criticized ambitious plan in April, dubbed the “Digital Wallet,” which aims to give 10,000 baht (about $275) in digital currency to 50 million citizens to spend at local businesses.
Prime Minister Srettha Thavisin said on the social platform X that registration will begin on August 1 and that he has given instructions to ensure smooth implementation of the program.
The “Digital Wallet” was a key campaign promise by the ruling Srettha’s Pheu Thai Party ahead of last year’s general election. The government says the plan will create an “economic tornado,” and Srettha has said the stimulus and subsequent consumption is expected to boost gross domestic product growth by 1.2 to 1.6 percentage points.
However, economists have criticised the programme, calling it an ineffective way to contribute to sustainable economic growth compared to other measures.
In addition, its financing has faced several obstacles, delaying its planned implementation. Initially, the government said that the State Bank for Agriculture and Agricultural Cooperatives would cover part of the necessary financing. However, after warnings from financial experts, it was announced that the project would be financed from the 2024 and 2025 budgets.
Deputy Finance Minister Julapan Amornvivat said at a news conference on Monday that the budgetary financing became possible after the estimated cost of the plan was reduced from 500 billion baht ($13.8 billion) to 450 billion baht ($12.4 billion). He said all of the estimated 50 million people will still be part of the program, as only 90% of eligible people took advantage of it in previous support measures.
Julapan added that the Digital Wallet Committee has agreed to ban tens of thousands of merchants and cash receivers who have committed fraud in the past.
The plan also has certain restrictions, such as excluding certain goods that have yet to be decided, and earlier proposals suggested that oil, services and online purchases should also be included. Julapan said the Commerce Department would handle the exclusions, which will be announced next week after the detailed plan is submitted to the Cabinet.
Thailand has suffered in recent years from a sluggish economy that appears to have deteriorated with no clear signs of growth. This month, the World Bank’s Thailand Economic Monitor forecast GDP growth of 2.4% for 2024.
The ruling Pheu Thai party had initially proposed allowing all Thais aged 16 and over to pay via digital wallets. However, this was later limited to lower-income Thais, defined as those with an annual income of up to 840,000 baht (about $23,000) and savings in financial institutions of up to 500,000 baht ($13,700).