Former Thai finance minister, Thirachai Puvanatnaranubala, has questioned claims by the Srettha government that the much-publicised digital wallet scheme will help Thailand achieve a 5% growth in GDP next year and urged it to focus more on the supply side.
He said he doubts that the scheme will increase the competitiveness of the Thai economy in the long run either.
Deputy Finance Minister Julapun Amornvivat has, however, insisted that the scheme will add 2 trillion baht to currency in circulation and help to boost GDP by 5%.
The digital wallet, one of the Pheu Thai Party’s election manifesto promises, will see Thai people aged 16 and over receive a one-off benefit of 10,000 baht. The money must be spent within 6 months and within a 4km radius of their registered address. 560 billion baht is needed to finance the scheme, the source of which remains unclear.
“I would much prefer that the government spend that money on the supply side, rather than to stimulate spending,” said Thirachai, who served as finance minister in the Yingluck Shinawatra administration.
Thirachai recommended more investment in upgrading the skills of the workforce and improving education as long-term solutions. He also urged the government to be serious about tackling the problems of business monopolies.
“Handing out money to stimulate spending might have worked during the COVID-19 pandemic, when the country was locked down and people needed help. Borrowing to finance handouts under those circumstances is justified,” he said.
Thirachai said that, under the current situation, however, there is no immediate need for such a stimulus, which will not bring about a concrete economic return.