Thailand may scale down handout plan as concern grows over viability

BANGKOK (Reuters) – Thailand’s government will consider scaling down its controversial handout policy to apply to 16 million poor people, an official said on Wednesday, as pressure mounts on the new administration to rethink its signature stimulus plan.

Under the current plan, which has drawn widespread criticism from economists, 57 million Thais would be eligible for handouts in digital form worth 10,000 baht ($276.40) each, amounting to about 560 billion baht ($15.48 billion).

Economists and some former central bankers have urged the government, led by the populist Pheu Thai Party, not to forge ahead with its “digital wallet” programme, warning it could be fiscally problematic and further stoke inflation.

A government-appointed committee would soon decide how many people should be entitled to the handout, Deputy Finance Minister Julapun Amornvivat said.

“Right now there is no conclusion on people eligible for the programme. There are still differing opinions on cutting rich people out, or giving money to impoverished people,” he told a press briefing.

The committee would also consider excluding people whose monthly incomes and savings were over certain thresholds, which would mean 43-49 million people would be eligible, he said.

The government has yet to decide how it would fund the controversial stimulus plan. It is set to be rolled out in the first quarter of next year but Julapun on Wednesday said it could be delayed until April or May. He ruled out loans as a source of funding.

Prime Minister Srettha Thavisin on Tuesday defended his government’s economic stimulus measures, saying they were aimed at addressing short-term needs like reducing the cost of living.

The economy grew just 1.8% in the April-June quarter from a year earlier, much slower than the previous quarter, as weak exports and investment undercut a tourism rebound.

($1 = 36.1800 baht)

(Reporting by Kitiphong Thaichareon, Satawasin Staporncharnchai and Panu Wongcha-um; Writing by Martin Petty, Editing by Emelia Sithole-Matarise)