Following Prime Minister Srettha Thavisin's statement last Friday about the government's 10,000-baht digital wallet handout to an estimated 50 million people, supported by lending of up to 500 billion baht, the private sector expects small businesses in the retail, service and tourism sectors to directly benefit.
Yol Phokasub, president of the Thai Retailers Association (TRA), said the scheme should benefit these sectors and create job opportunities.
“We expect SMEs [small and medium-sized enterprises] in the retail, service and tourism sectors, a total of more than 2.4 million SMEs or 80% of small businesses nationwide, will directly benefit from this programme,” he said.
Mr Yol said the TRA believes in the potential of this policy to drive short-term economic growth because the injection will cover all areas and help local businesses at all levels.
To ensure widespread effectiveness, he urged clear and transparent details and conditions for the digital wallet scheme.
“Clearer measures can help build understanding and confidence in people and business operators, particularly small shops, street food vendors, grocery stores, hawkers and stalls. In addition, the criteria should be adjusted to make it accessible,” said Mr Yol.
He suggested starting the scheme in April next year instead of May to maximise its impact as people normally return to their hometowns during Songkran.
The TRA is also in favour of the rapid approval of the e-refund scheme, as well as lengthening the duration from the previous scheme to make it more efficient, said Mr Yol.
Voralak Tulaphorn, chief marketing officer of the Mall Group Co, the operator of The Mall Department Store, said based on the details and conditions, the digital wallet scheme should largely benefit SMEs.
The Mall Department Store will receive some benefits from this scheme if the government launches the e-refund scheme to stimulate spending among high-spending customers, she said.
Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce, said the proposed digital wallet policy is expected to stimulate Thai economic growth by 1.5 to 2 percentage points to reach 5% growth, as the government projects.
The Finance Ministry previously forecast GDP growth of 3.2% in 2024 if the government ran a budget deficit of 600 billion baht.
However, Mr Thanavath noted if the global economy gradually improves, Thai growth could exceed 5%.
The reheated e-refund project, formerly known as “Shop Dee Mee Khuen”, is a shopping tax incentive where individuals spending 50,000 baht can request a tax refund. This is expected to increase spending in the first quarter of 2024, he said.
Anticipated spending from digital wallets in the second quarter, coupled with holiday expenditures during Songkran, should total 130-140 billion baht, said Mr Thanavath.
“This should significantly boost the economy, encouraging people to purchase goods in their local areas, leading to increased use of local raw materials and inventory turnover,” he said.
In June, the government plans to inject an additional 100 billion baht from the competitiveness development fund to further stimulate the economy. However, the conditions for future spending need to be monitored closely, said Mr Thanavath.
Additional funds are expected to be available in October, while additional spending, especially from the tourism sector, is anticipated in the fourth quarter, he said.
Regarding inflation, Mr Thanavath said it is not a major concern as the Bank of Thailand previously predicted 4.4% GDP growth for Thailand next year, assuming the digital wallet project is implemented.
The inflation rate is projected at 2.5% next year, slightly higher than the 2% forecast for this year.
Kobsak Pootrakul, senior executive vice-president of Bangkok Bank and former minister to the Prime Minister’s Office, said the bank anticipates the Thai economy expanding by 3-4% in 2024, mainly driven by the tourism sector and robust domestic consumption, including from the digital wallet scheme.
However, external risk is a key challenge for the Thai economy next year, particularly the sluggish global economy, China’s slow recovery, and the Israel-Palestine war, he said. The global economy is expected to improve in the second half of 2024, said Mr Kobsak.