BOT Governor suggests digital wallet for specific groups only
The Bank of Thailand governor believes the government should provide the digital wallet money handout to specific groups only to minimise strain on the national budget and avoid potential adverse financial impacts that could follow.
BOT’s governor Dr Sethaput Suthiwartnarueput told Prime Minister and Finance Minister Srettha Thavisin on September 14 that the central bank is concerned about the economic recovery.
The Thai economy has not performed well during the second quarter, with a growth rate of 1.8% lower than expected. However, one area that has shown strong growth is domestic consumption. Therefore, what is required is more investment.
As for his opinion on the government’s digital wallet' policy, he said it is necessary to wait for a clear format to emerge before making a judgement. The central bank has consistently stated that it does not support a digital asset as this would make the wallet a payment intermediary, which does not support financial stability.
E-money, however, is a format that already exists in the system. In this case, it needs to be seen whether it will stimulate the Thai economy and what the effects on the treasury will be.
“What we really lack may not be about consumption but rather about investment. Different policies should be targeted at specific groups, which will save the budget because not everyone needs 10,000 baht. This is what we have discussed with the government," Dr. Sethaput said. He added that the BOT felt it important that various policies should have a clear medium-term picture, such as overall spending and the budget deficit, which will help build confidence in fiscal discipline and keep the fiscal position in check on all fronts.
Moreover, he warned that inflation rates in the near future could rise due to the risk of increases in global energy prices and the El Nino phenomenon, which may lead to higher prices for agricultural products. Food products have a relatively high weight in inflation calculations.
Therefore, monetary policy should be consistent with the long-term picture, keeping inflation within a sustainable range of 1-3% and not creating financial imbalances.
