Everything You Need to Know About Thailand’s $14 Billion Digital Wallet Stimulus Program

Thailand’s Prime Minister will disburse nearly $14 billion in cash handouts as his administration endeavors to revitalize an economy that has lagged behind most other Southeast Asian nations.

The program, which will distribute 10,000 baht ($275) to 50 million Thais via a digital wallet in the fourth quarter, was approved by a committee chaired by Srettha this week. It follows months of delays and conflicts with the opposition and the central bank over how the ruling coalition’s signature initiative should be financed.

Government officials are optimistic, projecting that the handouts could potentially boost growth by up to 1.8 percentage points. This is not the only stimulus measure Srettha has proposed. He has introduced incentives for the real estate industry and increased government spending in pursuit of a 5% growth target for Southeast Asia’s second-largest economy.

Last year’s economic growth was 1.9%, continuing a decade of average growth below 2%.

Srettha, who also serves as finance minister, secured funding for the cash handouts through a combination of budget allocations and loans from a state-owned lender. The Bank of Thailand, which has maintained interest rates for a third consecutive time, has expressed concerns about the financial stimulus’s potential risks.

What is the digital wallet program?

Srettha’s Pheu Thai Party initially proposed the digital wallet prior to the general election. The cash handouts were promoted as a strategy to “revive” the economy following a decade of sluggish growth under military-led rule.

Approximately 76% of Thailand’s 60 million people will receive the funds through a digital wallet app. The program targets adults earning less than 70,000 baht per month and with bank account balances below 500,000 baht.

Is there a timeline for the handout?

The cabinet must approve the program after a committee led by Srettha finalized it on Wednesday. Eligible beneficiaries and small businesses can register for the program in the third quarter of this year, with funds becoming available for spending over the following two quarters.

How can beneficiaries use the money?

Direct spending of the funds is not permitted. The digital wallet’s primary objective is to evenly distribute the cash throughout the economy. Beneficiaries must spend the money within six months within their residential area and can only purchase goods from small businesses registered in the program. Additionally, the purchase of alcohol, cigarettes, fuel, and online transactions is prohibited.

Participating businesses can spend the money generated from the program in a second round without restrictions.

How is the wallet funded?

The government has wavered on the funding mechanism, delaying the issue for months. Pheu Thai initially proposed budget funding, but Srettha’s coalition government opted to introduce a special parliamentary bill to request one-time borrowing.

This proposal encountered opposition from the central bank, economists, and the main opposition party, who argued that it could violate various laws and lacked justification for such a stimulus. Ultimately, the Srettha-led committee opted for a combination of budget support and a loan from the state-owned Bank for Agriculture and Agricultural Cooperatives.

Approximately 175 billion baht will be diverted from the current fiscal year’s budget, with an additional 152.7 billion baht coming from the 2025 budget. The Bank for Agriculture and Agricultural Cooperatives will contribute 172.3 billion baht and directly disburse funds to approximately 17 million beneficiaries, primarily farmers.

What impact will the wallet have on the economy?

The Ministry of Finance anticipates that the cash handouts will contribute 1.2 to 1.8 percentage points to GDP and drive growth to 5% next year. The additional financial burden is projected to increase the public debt-to-GDP ratio to 66.9% in 2025 and the fiscal deficit to 4.42% of GDP in the new fiscal year beginning on October 1.

Who are the probable beneficiaries of the wallet?

According to InnovestX Securities Pcl, companies operating convenience stores, supermarkets, and hypermarkets, such as CP All Pcl, its subsidiary CP Axtra Pcl, and Berli Jucker Pcl, are expected to be significant beneficiaries of the cash splurge. The brokerage also predicts an indirect benefit to all retail sector players as consumer purchasing power increases.