©Reuters. File photo: Thai Prime Minister Sureta Thabisin speaks at the Asia-Pacific Economic Cooperation (APEC) CEO Summit on November 15, 2023 in San Francisco, California, USA.Reuters/Carlos Barria/File photo
BANGKOK (Reuters) – Thailand's plan to revitalize the economy through a $14.3 billion cash transfer program will go ahead by May, Prime Minister Sureta Thabisin told reporters on Tuesday.
His comments came after the Council of State, an independent commission that provides legal advice to governments, found no reason to prohibit Suletta's government from borrowing to fund the plan.
The program, which gave 50 million Thais 10,000 baht (about $285) to spend in their local communities, was a signature election campaign policy of the ruling Thailand Contribution Party.
The government has dubbed the benefit a “digital wallet” program, as Thais can receive funds through a mobile app, and is aimed at boosting consumption and overall growth.
The government wants to boost the growth rate of Southeast Asia's second-largest economy to at least 5% a year, with last year's growth forecast at 2.4%.
The benefit plan has drawn criticism from economists and some former central bank governors who say it is fiscally irresponsible and could fuel inflation.
Suletta, who is also finance minister, said he would meet with the country's central bank chief on Wednesday to discuss economic stimulus and other issues.
The Prime Minister this week criticized the Bank of Thailand's interest rate hike, saying it would hurt small and medium-sized businesses at a time when inflation is low.
“There may be differences of opinion, but we need to have a discussion,” Sletta said, adding that it was a routine discussion.
Thailand's Chamber of Commerce and Industry said on Tuesday that the economy is expected to grow at least 3% year-on-year in the first quarter of 2024 and 3.2% for the full year, supported by tourism and exports.
The chamber said if the digital wallet scheme is implemented as planned, growth could rise by a further 1.0-1.5 percentage points in 2024, with the central bank cutting interest rates to support the economy. He added that he is also looking forward to it.
Thailand's headline consumer price index (CPI) fell by 0.83% in December, falling below the central bank's inflation target of 1-3% for the eighth straight month.