10,000-baht payouts will not boost spending, politician says

Sirikanya Tansakul, deputy leader of the People’s Party, congratulated vulnerable groups who have begun receiving funds from the government, but doubts the cash handouts will boost spending, as people will instead pay down debts. 

She clarified that this initiative is not the "digital wallet" programme the government campaigned for but rather an economic stimulus through cash handouts of 10,000 baht to these vulnerable groups. She urged the government to adhere to the law and utilise the 2024 budget before the September 30 deadline to avoid legal issues, which is the reason for the cash distribution to these groups.

“Due to the urgency, cash has been distributed. While the total amount for these vulnerable groups is substantial, they are indeed the appropriate recipients. For the remaining groups who have not yet received funds, I express my regrets, as they may have to wait until early next year for clarity on whether and when they will receive assistance,” Sirikanya said.

She added that the government initially planned to distribute a one-time payment of 500 billion baht, a substantial sum representing 20% of gross domestic product. However, this has now been reduced to one-third of that amount, resulting in a mere 0.35% impact on GDP growth. 

Therefore, she said, we will not see significant economic improvement by the end of this year, coinciding with reports from business operators who claim that despite cash distributions, the market remains quiet, with spending yet to increase. Recipients may focus on debt repayment before engaging in spending, further diminishing the economic impact. 

She noted that the anticipated economic surge promoted by the government seems unlikely, stressing the need for alternative economic stimulus policies.

“The government has assured that a second phase of cash distribution will happen, but without a specific timeline, it has been indefinitely postponed,” Sirikanya said. ”In the meantime, there are suggestions to allocate these funds to other projects before reconsidering the cash distribution. 

“Such mixed messages create confusion and gradually diminish public hope for a second payout. I urge the government to expedite the conclusion of discussions and finalise the Economic Stimulus Policy Committee's meeting schedule and timeline.”

Paophum Rojanasakul, deputy minister of finance, revealed that on September 25, withdrawals of 10,000 baht from automated teller machines (ATMs) of the Bank for Agriculture and Agricultural Cooperatives (BAAC) increased by 18.8 times compared with the previous day, September 24.

Meanwhile, the number of withdrawal transactions from Government Savings Bank (GSB) ATMs on September 25 surged by 1.76 times, with the amount increasing by 2.84 times. On September 26, the number of withdrawal transactions doubled, and the amount rose by 3.72 times compared with September 24.

He said these figures indicate that this segment of the population has a high necessity for cash, often withdrawing nearly all their available funds. This group exhibits a high marginal propensity to consume (MPC), which means their spending can immediately and effectively stimulate the economy.