Thailand's strategic plans boost economic development
Thailand’s cabinet on Tuesday approved an additional THB276 billion ($7.4 billion) in borrowing for the 2024 fiscal year, of which 269 billion THB is for direct government use as well as funds for state enterprises to restructure debt.
Mock-ups of the controversial digital wallet handout are among ceremonial offerings to be sold to shoppers in Yaowarat as part of the Chinese New Year celebrations on February 8, 2024. Photo courtesy of bangkokpost.com.
Deputy government spokeswoman Rudklao Intawong Suwankiri said that the change will bring total new borrowing in the fiscal year to 1 trillion THB.
She noted that ministers also approved a proposal by the Ministry of Finance to revise the public debt management plan for fiscal 2024. After the adjustment, the public debt-to-GDP ratio is forecast to stay at 65.1%, still below the framework ceiling of 70% of GDP.
The country’s debt-to-GDP ratio stood at 64.3% at the end of May, up from 63.8% the previous month.
Government spokesman Chai Wacharonke admitted the additional borrowing would be used to fund the 10,000-THB digital wallet handout, scheduled to begin in the fourth quarter and to cost 500 billion THB.
The cash handout to 50 million Thais, to be spent in their home district, is the centrepiece of Prime Minister Srettha Thavisin’s strategy to lift the economy out of a sub-2% average economic expansion in the past decade.
The plan is opposed by the Bank of Thailand (BoT) and some economists for its potential inflationary and fiscal impact. The central bank has advised the government to limit the benefit to only those in need, estimated at 16 million people.
The cabinet in May approved a plan to increase the fiscal 2024 budget by 122 billion THB to help finance the stimulus programme.
The deputy government spokeswoman said the revised public debt plan includes a net increase in new borrowing by 276 billion THB to support projects of the State Railway of Thailand and a new debt plan for state enterprises, with additional borrowing of 3.47 billion THB from domestic sources.
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