The government's 560-billion-baht digital wallet policy will stimulate the economy and create future income to support the ageing society, according to Deputy Finance Minister Julapun Amornvivat.
Despite mounting criticism from academics and economics professors, Mr Julapun said that if the Thai economy grows by only 2%, the country will not have the money to support the ageing society in the future.
This digital wallet stimulus policy will be a driver of the economy, targeted to expand by an average of 5% annually in the four-year term of this government.
Mr Julapun said the economy is not currently expanding to its fullest potential as many Thai people still have problems with a poor quality of life, especially vulnerable groups.
He said the stimulus policy will reawaken or restart the economy through fiscal multiplier, which would help improve people's quality of life and domestic spending, create employment and investment, and boost the manufacturing sector.
While the government will receive money back in the form of tax collection, the scheme will help address income inequality and accelerate the growth of e-government and the digital economy.
Mr Julapun also said many questions have been raised about the need for the digital wallet policy. The answer is that many people in Thailand, particularly farmers in rural areas, still suffer from low incomes from the agricultural sector. The government is also collecting less tax while household debt has increased, and government public debt has risen from 40% of GDP to over 60%.
"It is a fragile situation. Therefore, it is necessary to restart people's lives again," Mr Julapun said.
He added that Thailand's GDP growth is lower than other countries in the region.
Mr Julapun emphasised that the digital wallet policy is not cryptocurrency or money printing.
It is important to note that the government is developing its own digital wallet in the form of a utility token, which is not a new currency but rather a digital representation of the baht.
A condition stipulating that the currency can only be spent at local shops and businesses within four kilometres of a recipient's registered address may be relaxed. Those details will be clarified and announced by the Digital Wallet Steering Sub Committee by the end of October.
Mr Julapun said the policy would be financed by the fiscal budget. Moreover, he said the government will maintain fiscal discipline and forge ahead with its digital wallet stimulus policy,
He said that the first meeting of the Digital Wallet Steering Subcommittee will be held on Oct 12, and the subcommittee's conclusions will be presented on Oct 24.
Mr Julapun insisted that the government has no conflict with the Bank of Thailand governor in carrying out this policy as the governor also sits as a member of the committee chaired by the premier. However, there may be policy recommendations by the central bank which the government will take into consideration.