The Bank of Thailand (BOT) has initiated a thorough review of the new government’s financial policies, placing particular emphasis on the proposed 10,000-baht digital handout scheme presented by the Pheu Thai Party. This scheme, if implemented, holds the potential to spur an estimated 3 percent surge in the country’s GDP growth in the upcoming year.
Sakkapop Panyanukul, the Director of BOT’s Economic and Policy Department, disclosed that the central bank is currently in a wait-and-see mode, eagerly anticipating additional details regarding the handout scheme and other key financial initiatives before making any formal financial forecasts for the Thai economy in the following year. Nonetheless, utilizing a one-time cash transfer multiplier model, the central bank’s preliminary estimation suggests that the proposed scheme could necessitate a total budget allocation of approximately 500 billion baht. This substantial injection of funds is anticipated to contribute significantly to a 3% expansion of GDP in 2024.
Sakkapop further noted that the central bank may contemplate a revision to its 2023 growth forecast, potentially reducing it to 3.6%. This adjustment is attributed to the ongoing global economic slowdown and the gradual recovery observed in China. Despite a downturn in Thai exports during the second quarter of the current year, the country’s domestic demand has exhibited a positive trend, potentially bolstering economic growth. In addition, the revival of the tourism sector is expected to further support the nation’s economic recovery. He underlined that although the consumer sentiment index for August displayed a slight decline compared to July, primarily due to apprehensions surrounding the formation of the new government, the index is likely to rebound in the three months following the establishment of the new government.
The Director highlighted the continuous rise in the number of foreign tourists, even after accounting for seasonal adjustments. This resurgence has had a stimulating effect on the service industry, with foreign arrivals surging to 2.49 million in July, a notable increase from the 2.24 million recorded in the preceding month. The surge is predominantly attributed to tourists from China, Malaysia, Europe, and Russia.
It’s worth noting that the central bank had previously forecasted a robust 3.8 percent growth rate for the year 2024.