THAILAND’S government will forge ahead with its delayed 500 billion baht (S$18.7 billion) handout scheme to stimulate an economy that was in crisis and worsening, the deputy finance minister said on Thursday (Feb 15).

High interest rates and household debt were the main negative factors weighing on the economy, Julapun Amornvivat told reporters.

“The economy is fragile and so the government will continue with its stimulus policies,” he said.

The stimulus plan, called the “digital wallet”, was a key populist election platform of the ruling Pheu Thai party and entails giving away 10,000 baht each to 50 million Thais to spend in six months, to try to spur growth.

But the government has been hounded by concerns over how it will be funded, with some experts calling it fiscally irresponsible.

A consultative committee on the scheme, comprised of bankers, economists, finance and budget officials, was due to meet on Thursday. Julapun said that was not likely to come to any conclusion on its implementation, however.

A NEWSLETTER FOR YOU

Friday, 8.30 am

Asean Business

Business insights centering on South-east Asia's fast-growing economies.

Sign Up

“We will ensure that the programme is devoid of corruption,” Julapun added.

The handout is the signature policy of Prime Minister Srettha Thavisin, a real estate mogul who is also finance minister. He has repeatedly said the economy needs a big boost and the handout programme was the answer, though it might be delayed, pending more consultation.

Srettha maintains the economy, which is underperforming its peers, is in crisis and short-term stimulus was necessary, a view the central bank has disagreed with.

He has been pressing the central bank to cut rates, which it has so far resisted, this month keeping its key rate unchanged at 2.50 per cent, which is the highest in more than a decade. It next reviews monetary policy on Apr 10.

The finance ministry has slashed its 2024 economic growth forecast to 2.8 per cent from 3.2 per cent, with its estimate for 2023 growth now 1.8 per cent, from an earlier 2.7 per cent forecast. The economy expanded 2.6 per cent in 2022. REUTERS