Thailand’s new government is set to unveil a number of fiscal stimulus measures next week that will include debt suspension for millions of farmers and small businesses, and a cut in energy prices to bolster growth in an economy still reeling from the pandemic.
Prime Minister Srettha Thavisin, a former property mogul, will reveal his coalition’s policy priorities to the parliament on Monday. The main highlight will be a planned cash handout of 10,000 baht ($280) each through a so-called digital wallet to an estimated 55 million adults which will act as a “trigger that will wake up the country’s economy again,” according to a policy draft seen by Bloomberg.
Srettha, who also serves as the finance minister, is set to say the stimulus measures, debt suspension and fresh energy subsidies are urgent steps needed to cope with challenges ranging from geopolitical tensions, high household debt and El Nino. The government plans to ensure electricity, cooking gas and fuel prices are at “appropriate levels,” according to the document that’s been circulated to lawmakers but not released publicly.
Srettha’s office couldn’t immediately be reached for comment.
Economic Engines
“Thailand is like a sick person as Covid-19 hit us harder than other neighboring countries and damaged our economic engines like tourism,” Srettha will tell the lawmakers. “Spending is recovering slowly to the point that there is a risk of economic recession, which is why the need to stimulate the economy.”
The digital wallet program — set to be rolled out within the first quarter — is the main pre-election promise of Srettha’s Pheu Thai Party, and will cost an estimated 560 billion baht. Beneficiaries are required to spend the amount on goods and services in one’s neighborhood within six months.
Srettha and his cabinet were sworn in on Tuesday and now faces the task of jump-starting an economy amid rising interest rates and a slowdown in exports due to a weakening Chinese economy. He also needs to tackle household debt at 90% of gross domestic product and public debt at 61% of the GDP.
Other short-term priorities of the Srettha government include boosting tourism revenue by easing visa processes and fee waivers for travelers from select countries, as well as holding a referendum for overhauling the nation’s constitution.
Constitution Rewrite
The government will discuss guidelines for holding a referendum on a charter rewrite and seek a consensus. But the country will remain a constitutional monarchy with the king as the head of state with no plan to amend sections related to the monarchy, according to the policy statement.
Srettha was elected prime minister last month after Pheu Thai reached an agreement with military-backed and pro-royalist parties that swung the support of the influential Senate. The deal also saw Thaksin Shinawatra, the de facto leader of Pheu Thai, return from a 15-year self-exile and receive a partial royal pardon.
Srettha’s administration will also work with the military to shift to a voluntary military service as well as reduce the roster of high-ranking officials and modernize the arms procurement process.
Other key policies mentioned in the draft are:
- Accelerating free-trade agreements with the European Union, countries in the Middle East, Africa and South America and India
- Easing rules for foreign labor and skilled-workers to meet rising demand
- Taking steps to tackle the air pollution menace
- Scrapping and improving outdated laws including lifting curbs on production of homegrown alcohol
- Continue state investment in building transport infrastructure including road, air, water and rail
- Setting up four new special economic zones to spread the benefits of economic development
- Establishing a “Matching Fund” with the private sector to invest in start-ups