Thailand’s Prime Minister Srettha Thavisin has put forth a daring fiscal budget proposal amounting to 3.75 trillion baht ($102 billion) to reinvigorate the nation’s recovering economy. The budget, which Parliament is currently deliberating, projects a deficit of 866 billion baht, equivalent to 4.4% of the GDP, for the upcoming fiscal year starting October 1. This budget stands out for its emphasis on increased investment spending, which will constitute nearly a quarter of total expenditures, marking the highest proportion in 17 years.
A significant feature of the budget plan is the introduction of a cash-handout project aimed at providing 10,000 baht to each Thai citizen aged 16 years and older through a "digital wallet." However, this particular initiative faces opposition from the country's central bank. Despite this, Prime Minister Srettha defended the project, stating that it will not only drive consumer spending but also contribute to increased tax revenues in the future.
The allocation for the 500-billion-baht digital wallet program will be spread out over multiple budget cycles, with the hope that it will spur economic activity, generate orders, and lead to job creation. Srettha emphasized the importance of managing the budget gap diligently within established fiscal and monetary frameworks to ensure efficient use of taxpayer money.
However, Bank of Thailand Governor Sethaput Suthiwartnarueput remains steadfast in his disagreement with the proposed budget, advocating for targeted assistance to those in need rather than a broad-based stimulus. Despite the central bank's reservations, the budget is formulated on the premise of projected GDP growth ranging from 2.2% to 3.2% in 2024, with an anticipated acceleration to 2.8% to 3.8% in the following year. Inflation estimates for 2024 and 2025 range from 0.9% to 1.9% and 1.1% to 2.1%, respectively.
Thailand's economy, with an annual GDP of approximately $500 billion, is the second-largest in Southeast Asia after Indonesia, underscoring the significance of the proposed budget and its potential impact on the country's economic trajectory.