The announcement of three disqualifiers for the 10,000-baht digital wallet handout has eased concerns over the country's public and household debt, but could negatively affect economic growth and domestically-focused stocks, say analysts.
Amid concerns the costly digital wallet scheme will add risk to the country's fiscal positions and credit rating, Deputy Finance Minister Julapun Amornvivat said yesterday the scheme will focus on low-income earners, capping the monthly salary of eligible participants at 25,000 baht or 50,000 baht.
A subcommittee meeting also recommended limiting the handouts to the 16 million people who have state welfare cards, or people meeting specific wealth criteria based on income or savings. If it is limited to welfare cardholders, the project will cost the state 160 billion baht, down from the 560 billion originally estimated.
Asia Plus Securities (ASPS) said the lower budget required for the digital wallet scheme would ease concerns over the public debt-to-GDP ratio, which is at a high level at 61.8%, while household debt exceeds 90% of GDP.
However, limiting the eligibility for the digital handouts could reduce the country's GDP growth forecast for 2024, which is already expected to fall short of the Bank of Thailand's target of 4.4%, said the brokerage.
The adjustment could also create negative sentiment for stocks that are expected to benefit from the scheme, notably in the sectors of banking, retail, travel, transport and food, ASPS said in a research note on Thursday.
Finansia Syrus Securities said the subcommittee's proposed options to cut the number of people eligible for the digital handouts would lower the project's budget to 150-490 billion baht.
Krungsri Capital Securities (KCS) agreed the guidelines for distributing the money to families with incomes of less than 50,000 baht is a positive move, helping to ease market concerns about growing public debts and Thai bond yields.
Based on study recommendations from Krungsri Research, the digital wallet handout should be given to individuals whose monthly expenses are greater than their income, people who have debts, and those with a household income of less than 50,000 baht.
Debt-free individuals who have monthly household income of less than 10,000 baht have inadequate purchasing power and should also be included, said the think tank.
"Distributing money to these groups will help recirculate money in the economy by much more than handing it to those without financial problems," KCS said.
Clarity on the digital wallet policy regarding classifying the targeted groups for the handouts would affect stocks in the retail, banking and leasing sectors, said the brokerage.
