Thailand's 500 billion baht (US$13.78 billion) digital wallet handout scheme will be rolled out in the fourth quarter of this year and will be financed using the 2024 and 2025 fiscal budget, Prime Minister Srettha Thavisin said on Wednesday.

A finance ministry official told a briefing the policy would boost gross domestic product growth by 1.2 to 1.6 percentage points.

The signature populist policy of the ruling Pheu Thai Party is aimed at stimulating the economy and entails transferring 10,000 baht (US$275) to 50 million Thais to spend in their localities within six months.

The government has been scrambling to find ways to finance the scheme without overly burdening public debt and has faced criticism from some economists and former central bank governors, who have called the scheme fiscally irresponsible.

Last week, the cabinet approved a plan to expand its budget deficit next year by 152.7 billion baht, saying it would be used to stimulate the economy.

Srettha, who is also finance minister, has said repeatedly that the economy needs big stimulus measures, saying growth might have been less than 1% in the first quarter of 2024, following the annual 1.7 percent expansion in the previous quarter.

(US$1 = 36.3200 baht)

(Reuters)

Thailand's Prime Minister Srettha Thavisin during an interview in Koh Samui, Surat Thani province, Thailand, April 7, 2024. (Reuters)

Thailand to kick off US$13.8b handout scheme in Q4, use fiscal budget, PM says