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financial associated press, september 30 (editor shi zhengcheng)in order to pull the economy out of the sluggish quagmire, thailand, southeast asia's second largest economy, adopted a relatively simple and direct method-distributing money directly to tens of millions of people.

since pethonthan chinawat became prime minister of thailand in august this year, the coalition government led by the pheu thai party has begun to promote a series of economic stimulus policies, of which "discovery of gold" is a pillar project.as the youngest national leader in asia (38 years old), pethonthan comes from the shinawatrat family, a prominent political family in thailand. her father thaksin shinawatra and her aunt yingluck shinawatra both served as prime ministers of thailand.

(the person in the middle is thailand’s new prime minister pethonthan, source: pheu thai party)

people are "elated"

as the second largest economy in southeast asia,thailand’s gdp growth will slow to 1.9% in 2023.high household debt, weak exports and falling revenue from the tourism industry, a mainstay of the economy, have left the country in worse shape than major regional economies. for example, indonesia, the largest economy in southeast asia, had an economic growth rate of 5% last year.

despite the misgivings of the bank of thailand and political opponents, the pethonthan government promoted this "discovery gold" policy.

the pheu thai party had previously promised to provide a subsidy of 10,000 baht to each of 45 million people, which is equivalent to 2,177 yuan.in the first phase, which began in recent days, some 14.5 million people, including those with the lowest incomes in the country, will be able to receive payments from the government. the program initially envisioned distribution through digital wallets, but eventually settled on a more traditional method of transferring money directly into recipients' bank accounts.

because of this, thailand's mainstream media have been busy reporting that "people are happily receiving money" in the past two days. according to a report from thailand's third television, people lined up in front of the bank, and many shed tears of excitement. some old people said that after receiving the money, most of it would be transferred to their children and grandchildren, leaving only one thousand yuan for themselves.

(source: x)

statistics show that thailand’s population exceeds 71 ​​million.in recent days, the thai government has also been advancing legislation to increase the country's minimum wage to 400 baht/day (approximately rmb 87.15).. depending on the region, the current minimum wage in thailand is 330-370 baht/day. the pheu thai party has promised to further raise the minimum standard to 600 baht/day by 2027.

at the "launch of money distribution" ceremony, petuntan said that this subsidy can help distribute economic opportunities to the people. she promised,there will be more stimulus policies in the future, and will continue to promote the digital wallet project.

long-term economic problems remain to be solved

according to the latest news before publication, approximately 36 million thais have registered to receive subsidies. however, economists also predict thatthe long-term economic impact of this “10,000 baht per person” project remains to be seen.the thai government estimates thatthe first phase of cash payments alone will boost gdp growth by 35 basis points this year.。

the bank of thailand had previously expected the country's economic growth to reach 2.6% this year, but due to "structural problems", the growth rate is still lower than the economy's potential. however, the bank of thailand held its policy interest rate unchanged at 2.5% for the fifth consecutive meeting in august this year, resisting the government's call for an interest rate cut. at the time, monetary policymakers said interest rates were at neutral levels.

by the way, the bank of thailand criticized this "money distribution" plan as a fiscally irresponsible move.

(thailand’s base interest rate, source: tradingeconomics)

the total level of household debt in thailand currently exceeds 90% of the country's gdp, making it one of the most burdened groups in asia. debt pressure has also dampened consumer spending. the country's economy has also been hit by weak exports and a slowdown in tourism since the pandemic began.

lavanya venkateswaran, senior asean economist at oversea-chinese banking corporation (ocbc), expects the economic benefits from the first phase of the project to fade quickly.if the entire project is fully implemented as planned, it will be able to boost 1% of gdp.

venkateswaran cautioned: "can this growth push be sustained? is it the best way to spend money? will it help solve any structural problems facing the thai economy? these concerns have not gone away."