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Thailand goes ahead with USD14B handout

ANN/THE STAR – Thailand unveiled a USD14 billion cash handout to jumpstart its economy, trimming the size of the planned stimulus only slightly despite warnings from some economists and former central bankers that the outlay may stoke inflation and widen the fiscal deficit.

The so-called digital wallet programme will cover 50 million people with each receiving THB10,000 that may be ready for disbursal by May, according to Prime Minister Srettha Thavisin.

That’s down from an original proposal to extend the handout to 56 million people who are 16 years or older.

To be eligible for the cash handout, one should be earning less than THB70,000 a month and hold less than THB500,000 in savings accounts.

The cash dole will cost the government THB500 billion and will be funded through a one-time borrowing, Srettha said.

Vendors waiting for customers at a market in Bangkok. PHOTO: THE STAR

The government plans to move a special bill before the Parliament by early next year to facilitate the borrowing, he said, adding the administration will also inject THB100 billion into a capacity-building fund to promote automation and industrial innovation.

Shares of Thailand’s retailers and home-furnishing companies rallied on the wallet announcement while bonds and currencies fell on concerns of fresh borrowing widening the fiscal deficit.

Central Retail Corp Pcl jumped as much as six per cent, Berli Jucker Pcl surged 5.6 per cent, Home Product Center Pcl rose 3.4 per cent and Index Livingmall Pcl advanced three per cent.

The baht extended losses to 0.8 per cent, set for its first weekly loss in three, while the yield on 10-year sovereign bonds rose three basis points to 3.066 per cent.

The one-time digital wallet payment is the flagship pre-election promise of Pheu Thai Party that leads the current coalition government. Srettha, a former property tycoon-turned premier, has said the cash handout “will act as a trigger to revitalise the economy”, that has expanded at less than two per cent average in the past decade.