Thailand Approves $4.5 Billion in Stimulus That Includes Cash Handouts
(Bloomberg) -- Thailand’s government approved a set of economic stimulus measures worth 140 billion baht ($4.5 billion) to counter the impact from the nation’s biggest coronavirus outbreak yet.
The measures -- which include cash handouts to welfare-card holders and special groups, co-payments and cash rebates -- are expected to be implemented from July, Anucha Burapachaisri, a government spokesman, said Tuesday.
Thailand’s economy is facing strong headwinds from the country’s latest Covid-19 outbreak, which has totaled more than 130,000 cases since it began in Bangkok nightlife venues in April. Bank of Thailand Governor Sethaput Suthiwartnarueput said Monday the economy may not return to pre-pandemic growth levels until early 2023, three quarters later than previously expected.
The latest aid is on top of an 85.5-billion baht package last month that extended two cash handout programs. The most recent packages will be financed by borrowing under a 1 trillion baht program approved in April 2020, Anucha said.
King Maha Vajiralongkorn last week endorsed a further $16 billion borrowing plan to finance relief measures when the 1 trillion baht program runs out.
The latest measures, which target 51 million people, are expected to inject 473 billion baht both from government and private spending into the economy in the second half of the year, Kulaya Tantitemit, head of the Fiscal Policy Office, said Tuesday.
“We aim to start implementing the measures from July 1,” Kulaya said. “But, the timing can be changed, depending on the outbreak’s situation. We will need to monitor that closely.”
The package announced Tuesday includes:
- 93 billion baht in co-payments for consumer purchases, targeted at 31 million people
- 16.4 billion baht in cash handouts to 13.65 million holders of welfare cards
- 3 billion baht cash handout to 2.5 million people considered members of special groups, such as the disabled
- A 28 billion baht cash-back measure aimed at 4 million high-income people
The new outbreak has weakened prospects for an economic recovery, with Thailand’s central bank and the main economic-planning agency both warning of risks to their growth forecasts if a reopening of the country’s key tourism sector is delayed.
The planning agency said last month that after contracting 2.6% in the first quarter of the year, the economy now is expected to grow 1.5%-2.5% for all of 2021, compared with February’s 2.5%-3.5% forecast.
Thailand may experience an uneven K-shaped economic recovery this year, garnering support from exports while tourism continues to languish, the Bank of Thailand Senior Director Don Nakornthab said in an article published on the central bank’s website Tuesday that noted his view doesn’t necessarily reflect that of the central bank. The coronavirus outbreak would also exacerbate a widening of Thailand’s income gap, he wrote.
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