By Thanadech Staporncharnchai and Panarat Thepgumpanat
BANGKOK- Thailand’s new Prime Minister Paetongtarn Shinawatra said the economy needed stimulation, and she was ready to adjust the government’s flagship handout scheme worth up to 500 billion baht ($14.6 billion) to help people as soon as possible.
“There will be good news,” said Paetongtarn, who was elected premier last week, replacing SretthaThavisin.
She has yet to form her cabinet, and once that is done will have to resubmit her party’s flagship policy to parliament.
“The economy really needs to be stimulated,” she said.
“If we wait for the entire process without adjustments at all, people will suffer for longer,” she added.
The so-called “digital wallet” handout scheme, which would see about 50 million Thais each receive 10,000 baht of credit via a smartphone application to spend locally within six months, was planned to be rolled out in the fourth quarter under Srettha.
Paetongtarn’s comments came a day after her father, former Prime Minister Thaksin Shinawatra, said the handout policy was needed to spur a sluggish economy that has lagged peers.
Thaksin said the government was considering using 145 billion baht from the 2024 fiscal budget to provide handouts to 14.5 million people in September, with additional disbursements starting from October.
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.
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 planning agency maintained its export growth forecast at 2 percent for this year.
The economy has been supported by the tourism sector, which saw 21.8 million foreign tourists since the start of 2024 to Aug. 11, up 33 percent from a year earlier.
The agency still expects 36.5 million foreign tourists this year. There were a record of nearly 40 million foreign tourists in 2019, before the pandemic.
