Boosting Thailand’s economy: features of the digital wallet programme
The government plans to boosting Thailand’s economy by allocating USD 14 billion. The funds will come at the expense of external borrowing for 3 years.
Thai authorities will initially focus on the digital wallet programme, where various shops and individual sellers will participate. They will receive funds, which they will gradually redeem.
In addition, Thai Prime Minister Srettha Thavisin plans to allocate 10,000 baht to every person in the country as part of an economic stimulus programme. This one-off measure aims to boost economic activity and increase consumption. The programme will accelerate economic growth to around 5% over the next 4 years.
It is worth noting that experts have mixed perceptions of the new economic stimulus programme. First, financing through borrowing rather than the budget raises concerns. This approach could contribute to higher inflation and increase Thailand’s foreign debt. However, the government believes that such measures will accelerate the country’s economic growth.
Thailand has the second largest economy in the region, but its average growth rate over the past 10 years has been only 1.9%. This is significantly lower than neighbouring countries such as Vietnam and Indonesia.
Overview of the Thai economy
The economy grew by 2.5% in 2023, below the government’s expectations. This was partly due to a decline in foreign investor confidence. Thailand experienced a long period of political instability, with a new government only approved in August 2023. In addition, the local regulator raised the key interest rate to 2.5% in September, the highest level in 10 years.
Despite the slowdown in economic growth, there were good results, like:
– private consumption, which has been growing steadily for several quarters;
– the recovery in the tourism sector has accelerated, and demand from foreign visitors is growing;
– exports are improving, although global demand is still low.
In terms of forecasts, analysts expect Thailand’s GDP growth to be between 2.7% and 3.7% in 2024. However, these figures need to take into account the work and results of the digital wallet programme. The initiative will be part of the overall forecast once funding has been in place and all details have been finalised.
Tourism remains a key sector of the country’s economy. About 35 million travellers will visit Thailand in 2024, up from 28 million in 2023.
