Cabinet approves plan for 2024 budget boost to fund B500bn handout
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Cabinet approves plan for 2024 budget boost to fund B500bn handout

PM says economy could grow more than 2.5% this year

An event supporting the Pheu Thai Party’s 10,000-baht digital wallet was held on Oct 17, 2023, after more than 100 noted Thai economists urged the government to drop the scheme. (Photo: Somchai Poomlard)
An event supporting the Pheu Thai Party’s 10,000-baht digital wallet was held on Oct 17, 2023, after more than 100 noted Thai economists urged the government to drop the scheme. (Photo: Somchai Poomlard)

The cabinet on Tuesday approved a plan to boost the 2024 fiscal budget by 122 billion baht to help finance its delayed household stimulus scheme, Deputy Finance Minister Paopoom Rojanasakul said.

The plan would bring the new budget to 3.6 trillion baht, up 13% from the previous year, with the deficit rising to 805 billion baht, officials have said.

The move comes as the government plans to launch the 500 billion baht handout scheme, the ruling Pheu Thai Party's key platform in the 2023 election, in the fourth quarter, delayed from its earlier target due to a lack of funding and concerns about the impact on public debt.

The government earlier said it would finance the policy from the 2024 and 2025 budgets and use capital from the state-owned Bank for Agriculture and Agricultural Cooperatives.

Economists and two former central bank governors have said the programme, which will give 10,000 baht each to 50 million Thais to spend in their communities, is fiscally irresponsible.

The government rejects the criticism and says it is necessary to jumpstart the economy, which has lagged peers as it confronts high household debt and borrowing costs, plus weak exports amid an uneven recovery in top trading partner China.

Prime Minister Srettha Thavisin said on Tuesday the economy could grow more than 2.5% this year as the government would speed up 2024 budget disbursements.

"The budget has not been used yet and there will be an acceleration in disbursements," he told a press conference.

The 2024 budget was passed last month, delayed from the original start date of Oct 1, 2023 due to prolonged political gridlock following a May election.

Mr Srettha said the cabinet also approved the 2025 fiscal budget of 3.75 trillion baht.

On Monday, Finance Minister Pichai Chunhavajira said the government was planning other stimulus measures in the short term to revive growth, adding the economy should be expanding at least 3.5% annually.

Last month, the Finance Ministry cut its 2024 growth forecast to 2.4%, but said it could reach 3.3% if the handout programme is deployed in the fourth quarter as planned.

Southeast Asia's second-largest economy expanded 1.5% in the first quarter year-on-year, slowing from 1.7% growth the quarter before. Last year's growth was 1.9%.

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