Cash handout will give retail sector temporary boost
Wholesalers and retailers across Thailand say they are optimistic that the government's 10,000 baht cash handout, part of the Digital Wallet scheme for vulnerable groups, will provide a short-term boost to the country’s retail sector.
Industry experts predict the initiative will stimulate consumption and increase spending by 10-15% this year. However, concerns have been raised about the possibility of recipients spending the money on non-essential items.
The government began distributing the payments on September 25, with 14.55 million state welfare cardholders and people with disabilities receiving funds first. The rollout is expected to continue until Monday (September 30), gradually covering all eligible groups.
Somchai Pornrattanacharoen, honorary adviser to the Thai Wholesale and Retail Trade Association, reported a noticeable uptick in activity across Thai stores on the first day of the scheme. However, he noted that local shops had not yet seen a significant increase in purchases.
“Some vulnerable groups may need to use the money for essential personal expenses, to address debt issues, or to buy necessary household goods. There are concerns that some might spend on non-essential items,” he said.
He estimates that retail sales in the fourth quarter may remain stable compared to the previous quarter.
Milin Weerarattanaroj, an executive at Tang Ngee Soon Superstore, a leading local retailer in Udon Thani province, projects that 10-15% of the 140 billion baht allocated for the scheme—roughly 1,000-1,500 baht per recipient—will be spent in wholesale and retail stores nationwide.
“The first round of 10,000 baht payments may have a short-term stimulus effect on the retail sector,” Milin commented. “However, as the funds can be withdrawn as cash without restrictions on purchases, some people might choose to buy non-essential products such as alcohol or lottery tickets."
Despite the potential short-term benefits, industry leaders stress the need for the government to address underlying economic issues, particularly the high levels of debt faced by low-income groups. They are calling for structural reforms and long-term economic stimulus measures to contribute to a stable increase in people's income over time.
Additionally, there is a growing sentiment within the industry that a reduction in Thailand's interest rates is essential to alleviate the debt burden on citizens.
