Thailand’s new PM outlines policies to parliament as consumer mood drops

Thailand’s Prime Minister Paetongtarn Shinawatra delivers her government’s policy proposal to parliament at the Parliament in Bangkok on Sept. 12, 2024. (Reuters)

• Prime Minister Paetongtarn Shinawatra highlights signature plan for a ‘digital wallet’ handout of 10,000 baht to 50 million people
• The scheme has been criticized by economists and former central bank governors as fiscally irresponsible, which the government rejects

BANGKOK: Thai Prime Minister Paetongtarn Shinawatra on Thursday outlined her government’s policy agenda to parliament, headlined by plans to give away 450 billion baht ($13.4 billion) in handouts to jumpstart Southeast Asia’s second-largest economy.
Political newcomer Paetongtarn’s cabinet was sworn in this month, after parliament elected her Thailand’s youngest premier following the shock removal of predecessor Srettha Thavisin by a court decision.
The polices largely continue ally Srettha’s agenda and that of their populist Pheu Thai party, including debt restructuring and legalizing casinos to draw in investment and more tourists.
Paetongtarn told parliament her government was facing challenges, including structural economic problems, and said the government would act with urgency to stimulate growth.
“If there are no financial and fiscal measures to support economic growth, it is expected that the country’s economic growth rate will not exceed 3 percent per year,” she said.
That would result in the public debt level approaching the ceiling of 70 percent to gross domestic product (GDP) in 2027, she said. Public debt stood at 63.74 percent of GDP at the end of July.
“Therefore, it is a great challenge that the government must urgently restore the country’s economy to quickly grow strongly again,” Paetongtarn said.
While she highlighted the signature plan for a ‘digital wallet’ handout of 10,000 baht ($300) to 50 million people, some of which Paetongtarn has previously said will be given in cash, there were no updates on how or when it would be rolled out.
The government had said this week it would distribute 145 billion baht ($4.2 billion) of the program to support vulnerable groups later this month.
The scheme has been criticized by economists and former central bank governors as fiscally irresponsible, which the government rejects. It has struggled to find sources of funding.
The government insists the policy is necessary to energize the economy, which the central bank expects to grow 2.6 percent this year, up from 1.9 percent in 2023 but far adrift of most regional peers.
Consumer confidence dropped for a sixth straight month to a 13-month low in August, a survey showed on Thursday.
Paetongtarn, 38, made her debut appearance in parliament as Thailand’s second female prime minister. She is the fourth member of her family to hold the top job.
Among those was her father, the billionaire Thaksin Shinawatra, Thailand’s most influential and divisive politician over the past two decades, who has backed the stimulus plan and is a key figure behind her Pheu Thai party.