People shop at a market as Thailand is to inject $15.2 billion into economy next year through its digital wallet policy, in Bangkok, Thailand. (Reuters Photo)

BANGKOK- Thailand expects less than 40 million people to sign up for its flagship digital wallet handout scheme, with the first phase set to be distributed to 14.5 million vulnerable people from Sept. 25, a finance ministry official said on Monday.

The government has planned to give away 450 billion baht ($13.6 billion) to 45 million people under its stimulus program, which will see 10,000 baht ($300) transferred to each person who registers to spend in their localities within six months.

About 36 million people have so far registered for the program, some of which overlap with the vulnerable groups, LavaronSangsnit, the finance ministry’s permanent secretary, told reporters.

There are about 3 million people without smartphones, he added.

“From the current data, it is expected that the number of participants in the project will not reach 40 million, which will allow for more flexibility in budget management,” he said.

The second phase of the handout is expected in early next year, Lavaron said. 

Thailand’s economic expansion accelerated in the second quarter due to stronger consumption, tourism and exports, but analysts said policy uncertainty following a change in government clouds the outlook.

Gross domestic product grew 2.3 percent in the April-June quarter from a year earlier, National Economic and Social Development Council (NESDC) data showed, versus an upwardly revised 1.6 percent in the first quarter and beating 2.1 percent forecast in a Reuters poll.

Growth in Southeast Asia’s second-largest economy was driven by improved government consumption, export of goods and services as well as private consumption, while public and private investments contracted, the state planning agency NESDC said in a statement.

On a quarterly basis, GDP grew a seasonally adjusted 0.8 percent in the second quarter, slower than an upwardly revised 1.2 percent expansion in the previous three months and 0.9 percent growth forecast in the poll.

“We expect it to decelerate a bit further in the coming quarters as the boost from tourism fades and with uncertainty around fiscal policy now elevated,” Shivaan Tandon, markets economist at Capital Economics, said in a note, predicting interest rate cuts from October.

The central bank left its key interest rate unchanged at a decade-high of 2.50 percent for a fourth straight meeting in June.

The NESDC now expects GDP growth of between 2.3 percent and 2.8 percent this year, narrowing from its previous forecast range of 2.0 percent to 3.0 percent. The economy grew 1.9 percent last year.

Thailand’s economy has lagged regional peers as it faces high household debt and borrowing costs as well as sluggish exports amid a slowdown in top trading partner China.

The outlook is further clouded by political turmoil after last week’s court order   former Prime Minister Srettha Thavisin for violating the constitution over a cabinet appointment.