Thailand’s New Spending Strategy: 10,000-Baht Handout with a Twist

Thailand’s New Spending Strategy: 10,000-Baht Handout with a Twist

In a bold move to stimulate the local economy, Thailand has introduced a restriction on the 10,000-baht government handout, barring its use for purchasing mobile phones, electrical appliances, or electronic devices. This decision aims to channel funds into small businesses rather than large department stores.

The Thai government’s initiative to restrict the use of the 10,000-baht handout is a strategic effort to boost the economy by supporting local shops. The Deputy Finance Minister, Julapun Amornvivat, announced that these items would be placed on a negative list, ensuring that the digital cash infusion benefits small-scale retailers.

This move is part of a broader economic stimulus plan, which is expected to reach up to 50 million people. The government’s approach is to direct consumer spending towards local businesses, which are the backbone of the Thai economy.

Budget Adjustments and Economic Impact

The Fiscal Policy Office’s study has led to a budgetary adjustment, allocating only 80% to 90% of the 500 billion baht initially planned for the handout. This revision reflects the anticipation that not all eligible individuals will register for the scheme, thus eliminating the need for loans from the Bank for Agriculture and Agricultural Cooperatives (BAAC) as previously considered.

The funding for this handout will be drawn from the fiscal budgets of 2024 and 2025, with assurances from the government that sufficient funding will be secured even if all eligible individuals register.

A Policy Under Scrutiny

While the handout plan is a key policy of the Pheu Thai Party, it has faced criticism from economists and former central bank governors, who have labeled it as fiscally irresponsible. Despite these concerns, the government is pressing forward with the scheme, which is set to begin distribution in the last quarter of the year.

The proposals from the sub-committee will be presented to the main committee, chaired by Prime Minister Srettha Thavisin, and upon approval, the registration details and start date will be announced.