What the Srettha government has done during its first month in office

Prommin acknowledged that though the government had officially announced its policies, some were introduced a bit hastily, including the initiatives to reduce energy prices, support farmers, boost tourism, and implement soft power. He emphasised that the government would be introducing more policies in the coming months.

In its first month in office, the Srettha Thavisin-led coalition government's policies have focused on reducing government expenditure, increasing income and creating opportunities.

Prommin highlighted the significant economic impact on Thailand due to the Covid-19 pandemic, resulting in a 7% contraction of GDP. Prommin described the situation as "the heaviest fall and the slowest recovery”, raising questions about the actual improvement in Thailand's economy at present.

Household debt is another crucial indicator. The debt-to-GDP ratio has gone up from 70% in 2012 to 90% as of now. This increase illustrates the economic challenges faced by Thailand, he said.

The falling inflation — from 5.02% in January of this year to 0.30% in September — pointed to a decrease in purchasing power of the Thai population. However, the government's monetary policy has increased interest rates by 1.25%, reaching a rate of 2.50%. The government's task is to find ways to alleviate the people's financial burden and improve their well-being.

He said the initial policy direction of the government has been to "reduce expenditure”, focusing particularly on energy costs. This includes reducing electricity prices to 3.99 baht per unit in the latest billing cycle.

After that, the government announced the “agricultural debt moratorium” policy, starting from October 1, to help those weighed down by debt.

“It's akin to rescuing someone who's about to drown. The government will provide funding for these individuals to stay afloat before they can swim to the shore,” Prommin said.

Following this is the "income generation" policy, with tourism being at the forefront. This involves policies such as free visas for Chinese and Kazakhstani tourists traveling to Thailand. Additionally, issues like congestion, which hinder various aspects of tourism, were being addressed, he said.

Moreover, there's a focus on creating opportunities, which includes travelling to international meetings, such as the 78th United Nations General Assembly in New York City. This provides a chance to attract investments to Thailand, both in the energy and infrastructure sectors. The government has appointed a committee to review investment laws.

Prommin laid emphasis on investment, stating that there was considerable interest from major investors, such as Amazon Web Services, a subsidiary of Amazon, which announced plans to invest in cloud infrastructure in Thailand, amounting to more than US$5 billion (or 1.9 trillion baht) over the next 15 years.

The government has encountered challenges in attracting foreign investments, and they aim to address these promptly, he said. Recently, the prime minister called for the urgent formation of a committee to resolve investment-related issues. The committee, chaired by Professor Tongthong Chandransu, is focused on easing various obstacles, ensuring a more convenient investment environment, or forming the “Ease of Doing Business” committee.

The elevation of the One Tambon One Product (OTOP) idea to push Thailand’s soft power is another area of focus.

Recently, the PM chaired the first meeting of the National Soft Power Strategy Committee on unleashing the hidden potential of Thai products, turning them into income for the country.

A significant highlight of the government's policy is the creation of opportunities through digital money distribution via “digital wallets”, providing 10,000 baht to each individual aged above 16 years. Prommin clarified that this government manages money differently, pushing a policy of injecting digital money worth over 5.6 trillion baht into the economy without impacting the country's fiscal discipline.

The government confirmed at the high-level committee meeting, chaired by the premier, that this policy would not affect the country's credit rating. Concerns had been raised previously about what the money would be used for and how it would be repaid, which have been addressed, Prommin said. If done successfully, there should be no cause for concern, he assured.

The government affirms that the policy of injecting digital money is crucial for the economy, to stimulate economic activity. When people buy products, it boosts factory production, leading to more employment opportunities. Eventually, the government can collect more taxes, he explained.

Funding for digital wallet scheme

The government is currently considering various options to fund the digital wallet policy. There are generally 2-3 available options: utilising the annual budget, utilising funds under Article 28 of the Financial Discipline and Treasury Act, or resorting to borrowing if necessary, he said. The committee, chaired by Deputy Finance Minister Julapun Amornvivat, will summarise these options.

He said utilising the annual budget would involve diverting funds from certain unnecessary projects. For example, large-scale procurement contracts, if not essential, will be postponed. The government has already taken some measures in this regard by postponing significant procurement projects and allocating the budget for maintenance and upkeep instead, according to Prommin.

Another approach involves using the mechanism under Article 28, allowing specialised financial institutions of the state to disburse funds in advance. The government will allocate budgets to compensate for this. The government sees the feasibility of this approach even though there might be an extension of the fiscal limits. The government has a clear plan for reimbursement. For example, if the spending does not exceed 200 billion to 300 billion baht, a budget of approximately 100 billion baht would be allocated for reimbursement annually, completing the reimbursement within a period of not more than three years, Prommin said.

The final option is direct borrowing, which would not affect the public debt-to-GDP ratio. In the following years, the public debt would expand significantly, providing more flexibility, he said. However, the committee would analyse and reach a conclusion on the suitable options, or even a combination of various options, Prommin added.

Regardless, the work plan, including the implementation of policies in the future, would need to be closely monitored to ensure its success or to address any challenges that may arise, Prommin said.