The cost of the government's flagship digital wallet initiative has been scaled down to 450 billion baht from 500 billion, but the Finance Ministry still expects it to have a positive impact on the economy.
Deputy Finance Minister Paopoom Rojanasakul said the economic impact of the project remains the same despite the budget reduction because the Fiscal Policy Office (FPO) initially did not estimate that 100% of eligible individuals, referring to the 50.7 million people who met the criteria, would participate in the project.
The FPO estimated that 80% of eligible individuals, or about 40 million people, would take part in the scheme. Based on this number, the FPO estimated that the impact on GDP would be around 1.3-1.8%, he said.
"When there was concern from supervisory bodies such as the National Anti-Corruption Commission (NACC) that the budget allocation to this project should not be excessively high as it could deprive the government of opportunities to allocate the budget to other development areas, the Finance Ministry adjusted the project budget down to 450 billion baht," said Mr Paopoom.
He said the FPO already has the data of participants in various other government initiatives such as the Khon La Khrueng (Half-Half) co-payment subsidy scheme and the Chim Shop Chai (taste, shop, spend) scheme. The participation rate in these initiatives reached around 80% of those eligible to participate.
Therefore, in response to this concern, the digital wallet subcommittee, which met on Wednesday, proposed reducing the project budget to 450 billion baht, based on an expectation of around 40 million participants. However, he noted that if more people took part, the government has budgetary mechanisms in place to allocate sufficient funds.
Mr Paopoom said the list of items that could not be purchased under the digital wallet scheme includes electrical appliances, electronics and communication devices because items in these categories have a high level of imported content. The government wants to prevent the project's funds from flowing out of the country, he said.
However, the final decision would be made by the Digital Wallet Policy Committee chaired by the prime minister at a meeting scheduled for July 15, said Mr Paopoom.
In a separate development, Mr Paopoom chaired the launch of a new portfolio guarantee scheme (PGS 11), operated by the state-owned Thai Credit Guarantee Corporation (TCG), with a budget of 50 billion baht. He said this project aims to enable SMEs, particularly those previously overlooked by financial institutions due to a high level of risk, to access the credit system. The project would prioritise providing guarantees to them first, he noted.
According to Mr Paopoom, 90% of the 50-billion-baht loan guarantee budget is expected to be utilised by the end of this year. The PGS 11 guarantee project offers favourable conditions for SMEs, including free guarantee fees for the first two years and a reduced fee of 1.5% (from the regular rate of 1.75%) in the subsequent years.
He said the economic impact of TCG's guarantees has a multiplier effect of 4.13 times, allowing the PGS 11 project to create an estimated economic value exceeding 200 billion baht. It would help around 70,000 SMEs gain access to credit and stimulate financial institutions to extend loans to SMEs amounting to around 60 billion baht, he said.
Thailand has around 3 million SMEs, accounting for 90% of all businesses in the country. SMEs contribute around 35% to the national GDP and represent 70% of the country's total employment.
