Bangkok: Rungthiwa Pimphanit, a 34-year-old government employee from Nong Bua Lam Phu in northeastern Thailand, had placed her hopes in a much-publicized 10,000 baht ($307) cash handout promised by the ruling Pheu Thai party. But after months of waiting, the flagship economic stimulus scheme has been postponed, leaving her deeply disillusioned.
“I’m very disappointed and angry,” she said. “There’s no way I will vote for them again.” Like many, she intended to use the funds to support her family, specifically to buy school supplies for her son.
The handout plan, central to Pheu Thai’s 2023 election campaign, aimed to jumpstart Thailand’s sluggish economy. But the recent announcement of its delay has fueled skepticism about the government’s ability to deliver on its promises. Prime Minister Paetongtarn Shinawatra attributed the setback to looming U.S. tariffs, yet analysts warn the political cost could be severe.
“No one will believe anything they say,” noted Thanaporn Sriyakul, director of the Political and Policy Analysis Institute. “The government must keep its promises to the people during the campaign. If they can’t do what they said, it’s over.”
Government spokesperson Jirayu Houngsub attempted to downplay the situation, assuring that the scheme was not canceled but merely postponed. “By that time, if the economy is good, there may even be something more than this programme,” he said, referring to the two years left until the next election.
The digital wallet scheme has enjoyed widespread public support. A May survey by the National Institute of Development Administration found that about 60% of respondents favored its continuation, while nearly half said they would be upset if it were scrapped.
“I’m upset,” said 52-year-old Bangkok resident Sathanee Siriphonchaikul, who had planned to use the funds for a new washing machine. “I don’t think they’ll do it again. The economy is bad.”
Political analyst Sukhum Nuansakul noted that the credibility of the Pheu Thai party has taken a hit. “The digital wallet project hasn’t worked,” he said. “People hoped they would get it and they waited for it, but didn’t get it.”
Opposition voices are also pressing the government for clarity. Thirachai Phuvanatnaranubala, deputy leader of the Palang Pracharath Party, called on the administration to be transparent. “The government should tell the truth to these people that it actually won’t be able to continue the programme due to budget and technical problems,” he said in a statement.
Growth Struggles and Mounting Debt
Thailand’s economic performance continues to underwhelm. According to central bank Governor Sethaput Suthiwartnarueput, the handout scheme had little impact on boosting consumption because many recipients used the funds to repay debts instead. Thailand currently has one of the highest household debt levels in Asia, at 88.4% of GDP.
Originally pitched as a bold measure to revive the pandemic-hit economy and achieve 5% annual growth, the stimulus plan has fallen short. Thailand’s $550 billion economy grew just 2.5% in 2023 and is projected to do even worse in 2024.
Since the scheme’s launch in September, only about a third of the allocated 450 billion baht ($14 billion) has been disbursed. The first tranche of 144.5 billion baht went to welfare recipients and individuals with disabilities, while a second tranche of 29.9 billion baht was given to senior citizens in January.
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Now, the 157 billion baht originally earmarked for the next stages of the program will be redirected toward economic resilience projects in anticipation of proposed U.S. tariffs, under recommendations from the central bank and the state planning agency.
“Both of them asked us to reconsider, to see if this money can be used for something more urgent and necessary than the digital money handout,” Prime Minister Paetongtarn said while announcing the delay.
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Thailand faces a potentially crippling 36% tariff from the U.S. if it fails to negotiate a reduction by July. Currently, a 10% tariff remains in place. In light of these challenges, the state planning agency recently downgraded the 2024 growth forecast to between 1.3% and 2.3%, warning that the effects of the tariffs could linger for two years.
Critics like Prakit Siriwattanaket, managing director of Merchant Partners Asset Management, say the government’s policies are falling flat. “The downside of the digital wallet is that it didn’t stimulate the economy as they thought,” he said. “It’s an extremely wasteful handout.”
