Budget will 'jump-start' growth
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Budget will 'jump-start' growth

PM stands by digital wallet, despite cost

PM Srettha Thavisin speaks in defence of the 3.75-trillion-baht budget bill for the 2025 fiscal year to jump-start the sluggish economy.
PM Srettha Thavisin speaks in defence of the 3.75-trillion-baht budget bill for the 2025 fiscal year to jump-start the sluggish economy.

Prime Minister Srettha Thavisin outlined the 3.75-trillion-baht budget bill for the 2025 fiscal year aimed at jump-starting Thailand's sluggish economy as the House of Representatives began a three-day debate.

The budget is aimed at helping the economy grow to its full potential, Mr Srettha told the House meeting on Wednesday. The economy is expected to grow 2.5% to 3.5% in 2025, with inflation projected at 0.7% to 1.7%, he said.

Earlier this month, Mr Srettha expressed confidence the economy would brighten in the fourth quarter, though the government is now focusing on how to improve economic growth in the third quarter.

He told the House the government recently launched its "Ignite Thailand'' vision for the country that aims to leverage its strengths to emerge as a regional hub in eight key sectors: aviation, tourism, wellness and medical, agriculture and food, logistics, future mobility, digital economy and finance.

This vision will serve as a guideline for 2025 budget spending management, the prime minister said.

However, he said, the economy still faces limitations and risk factors stemming from geopolitical tensions and trade protectionism which could hurt the global economy.

Mr Srettha also gave an assurance that 50 million eligible people will each receive 10,000 baht under the government's digital wallet scheme in the last quarter of the year as planned.

Opposition leader Chaithawat Tulathon takes to the floor to criticise the government's budget bill as misguided and outdated. (Photos: Chanat Katanyu)

"The digital wallet scheme will create economic whirlwinds to stimulate the economy from the grassroots level upwards.

"It will spur spending, production, and employment, which in turn will bring tax revenues to the government to invest in projects to boost the country's competitiveness," Mr Srettha said.

Sources of the 2025 budget will come from estimated tax revenue of 2.88 trillion baht and a loan to offset a budget deficit of about 865 billion baht earmarked for the 2025 fiscal year.

Even though the budget deficit is higher than the current fiscal year's, the government has set aside 908 billion baht for investment, representing 24.2% of the total budget and a 27.9% increase from the 2024 fiscal year, he said.

The National Economic and Social Development Council (NESDC) reported economic growth of 1.5% year-on-year for the first three months, which was lower than expected and came as a shock to some observers.

The NESDC now expects GDP growth of between 2% and 3% for the year, slightly lower than its previous forecast of 2.2% to 3.2%. Last year's growth was 1.9%.

On May 28, the cabinet approved a budget bill worth 3.75 trillion baht for the 2025 fiscal year, starting Oct 1 and ending Sept 30 next year. Some 152.7 billion baht was earmarked to fund the government's 500-billion-baht digital money handout scheme. The cabinet also approved a proposal to spend 122 billion baht from the 2024 fiscal budget to finance the scheme.

Of the 122 billion baht, 111 billion baht will come from a budget deficit while the rest will be diverted from the other parts of 2024's spending, according to the Budget Bureau.

Previously, the government said it also planned to use funds from the Bank for Agriculture and Agricultural Cooperatives (BAAC), worth 172 billion, as one of the three main sources of funding. However, obtaining a loan from the BAAC to finance the scheme will run into legal hurdles. BAAC law says the bank can only provide financial assistance to farmers, posing an obstacle.

During the debate, Chaithawat Tulathon, leader of the opposition Move Forward Party, criticised the budget bill, saying the government's loan plan to offset the budget deficit of 865 billion baht almost reach the borrowing ceiling allowed by law, with only 5 billion baht that can be borrowed.

He said there are only about 163 new projects that have receive budget allocations for the 2025 fiscal year, which is fewer than those allocated budget funds in 2024.

Mr Chaithawat also took aim at the ruling Pheu Thai Party's digital-wallet scheme, saying the government has been trying to push for the project regardless of its potential impacts on the economy.

The government plans to draw some 152.7 billion, or about 18.9% from the 2025 budget's 805-billion-baht central fund to finance the scheme, he said. "Budget allocations to finance the scheme will put the country at risk of financial problems. The government's debt repayment burdens will also increase," Mr Chaithawat said.

Jurin Laksanawisit, a Democrat Party list MP, said the government is trying to spend as little as possible in the current fiscal year so it can divert the rest to finance the wallet scheme.

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