BANGKOK – Thailand’s government plans to inject as much as US$4.4 billion (S$5.86 billion) more in cash to push growth beyond 3 per cent in 2025, as the export-reliant economy faces headwinds from global trade tensions and a volatile local currency.
The country’s economic stimulus panel approved the third phase of the government’s flagship cash handout plan.
The latest tranche is worth 27 billion baht (S$1.06 billion), which will be distributed towards the middle of 2025 to Thais aged 16 to 20, Finance Minister Pichai Chunhavajira told reporters after a meeting on March 10.
About 2.7 million beneficiaries in that age group will receive 10,000 baht each, with the disbursement set to be made through a new “digital wallet” application meant to boost spending, the minister said.
The plan will require approval from the Cabinet.
“The cash handout will be spread out across the country and ease household debt burdens,” Mr Pichai told reporters. “The government thinks the scheme will be worth it.”
The fund for the third phase is included in the 150 billion baht budget remaining to be disbursed as cash handouts by the end of the third quarter, which marks the end of the current fiscal year, according to Deputy Finance Minister Paopoom Rojanasakul.
The next group to receive cash will be those aged 21 to 59.
The stimulus is the centrepiece of Prime Minister Paetongtarn Shinawatra’s efforts to revive an economy that grew 2.5 per cent in 2024, about half the pace of neighbouring Indonesia’s growth.
Thailand’s economic growth is weighed down by high household debt levels that hurt private consumption and remain the highest in region, at 89.6 per cent of gross domestic product.
Thailand runs a trade surplus of around US$35 billion with the US, its second-largest trading partner, and faces risks of reciprocal tariffs from the Trump administration.
“The Ministry of Finance estimates that the Thai economy will grow by 3 per cent this year, but the government believes that the figure should exceed that,” Ms Paetongtarn said in a post on X earlier on March 10.
The handout plan would follow 145 billion baht already paid out to 14.5 million state welfare card holders and people with disabilities in late 2024, and 30 billion baht earlier in 2025 to about three million senior citizens aged 60 and above.
The government has also prepared some 46 fiscal projects to stimulate economic growth in 2025, including boosting public spending to over 70 per cent of the budget outlay and accelerating exports by more than 4 per cent, according to Mr Pichai.
The government also plans to spur tourism, another major driver of growth.
Mr Pichai reiterated calls for a weaker baht to support tourism and exports.
The Thai currency has gained about 4.8 per cent against the dollar in the past year to emerge as the second-best performer in Asia – prompting calls from business groups, exporters and tourism operators to weaken the currency and curb its volatility.
The Bank of Thailand surprised markets at the end of February with a policy interest rate cut, while mentioning risks to the growth outlook amid rising threats of a global trade war.
The central bank also said it was closely monitoring movements of the baht. BLOOMBERG
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