The Thai government is launching a 450 billion baht ($12.5 billion) “digital wallet” stimulus program to revive the country’s ailing economy. The program will provide one-time handouts of 10,000 baht ($277) to eligible Thais, with the goal of boosting economic activity and generating additional tax revenue.
Key Takeaways
- The Thai government has launched a new 10,000 THB digital wallet program for low-income Thai locals.
- However, the plan has faced some criticism, with concerns that it could increase inflationary pressures in the Thai economy.
- The first round of registrations will be open from August 1 to September 15 and conducted through the mobile application.
- One key technology being used in developing the digital wallet and the Thai Transfer program its the use of CBDC.
The initiative aims to help and distribute income to those with a certain low-income level. The application used for the project was created by the Digital Government Development Agency (DGA).
The first round of registrations will be open from August 1 to September 15 and conducted through the mobile application.
Participants can register to be part of the initiative using their cell phones, and those who do not have one can enroll in the second round, from September 16 to October 15.
During the first two days of registration, nearly 20 million people signed up to participate in the initiative, according to government spokesman Chai Wacharonke.
One key technology being used in developing the digital wallet and the Thai Transfer program its the use of CBDC.
The Bank of Thailand has been moving forward with the development of some trials to explore the use of CBDC, specifically known as the Digital Baht.
The CBDC could coexist with physical money, being used as a new transactional method. The digital wallet initiative already includes some features that will enable the use of CBDC.
Details of the “Digital Wallet” Stimulus Program
- The program will allow eligible Thais to receive one-time handouts of 10,000 baht ($277).
- Eligibility criteria include being 16 years or older, having an income below 840,000 baht ($23,296) in the 2023 tax year, and not serving a prison sentence.
- The payments can be spent at any shop that enrolls in the program, but cannot be used to buy certain goods like alcohol, tobacco, and electronic devices.
- The program is expected to enroll around 45 million people, with the registration period beginning on August 1 and payments expected to be distributed in the fourth quarter of the year.
Objectives and Potential Impacts of the Stimulus
- The program is seen as a key part of Prime Minister Srettha Thavisin’s efforts to revive the Thai economy, which has struggled with sluggish growth since the COVID-19 pandemic.
- The government hopes the stimulus will “revitalize our entire economic system” by generating more income and additional tax revenue.
- There are concerns about the potential inflationary impact and long-term sustainability of the stimulus plan, posing a significant gamble for Prime Minister Srettha’s government.
Financing and Implementation of the Stimulus
- The program was initially estimated to cost 500 billion baht, but the government has since revised the estimate to 450 billion baht, as it expects only 90% of eligible citizens to enroll.
- The government has settled on a solution to fund the program over the next two budgets, with 165 billion baht from the 2024 fiscal year and 285 billion baht from the 2025 fiscal year, avoiding the need for additional borrowing.
- The program was initially intended to begin earlier this year, but was delayed by disagreements over how to pay for it.
The development of the digital economy in Thailand
Thailand’s digital economy has been rapidly evolving, positioning the country as a significant player in Southeast Asia. The Thai government has been proactive in promoting digital transformation, aiming to make Thailand a regional hub for the digital economy by enhancing digital security, competitiveness, and investment.
The digital economy in Thailand encompasses various sectors, including software, hardware, smart devices, digital services, digital content, and communications. Among these, digital services have shown remarkable growth, driven by advancements in fintech, health tech, and retail tech.
The market value of the digital industry in Thailand has been steadily increasing, with significant contributions from internet and mobile banking transactions, which have seen substantial growth over the past few years.
Thailand’s strategic initiatives, such as the Thailand 4.0 policy, aim to transform the country into a value-based economy driven by innovation, technology, and creativity. This policy focuses on developing high-tech industries, including the digital sector, to boost economic growth and improve the quality of life for its citizens.
The government has also launched incentives to support the growth of high-tech industries, further accelerating digital transformation.
Thailand’s commitment to digital transformation is evident in its investment in ICT infrastructure and digital technologies. The country has been enhancing its cloud technology capabilities, with many government and private sector operations now utilizing cloud services.
