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Thai Chamber Predicts GDP Growth Surge from Digital Cash Stimulus
The first phase of the 2024 economic stimulus program, which distributes a 10,000-baht stipend to vulnerable groups, has commenced. The program, totaling 145 billion baht, is expected to have an immediate impact as recipients are free to spend the cash, particularly on essential goods and local services.
Key Takeways
- The 2024 economic stimulus program in Thailand, distributing a 10,000-baht stipend to vulnerable groups, has begun with a budget of 145 billion baht. Dr. Thanavath Phonvichai from the University of the Thai Chamber of Commerce (UTCC) stated that most recipients plan to use the funds for essential goods, potentially circulating the money through the economy multiple times.
- Spending is expected to initially focus on local markets, benefiting community businesses, and later supporting larger suppliers. This multiplier effect should boost the economy during festive periods like Loy Krathong and New Year, positively impacting the tourism sector. Dr. Thanavath anticipates that the stimulus will drive Q4 GDP growth to 3.8-4.3%, exceeding earlier projections.
- Beyond immediate effects, experts like Sanan Angubolkul, Chairman of the Thai Chamber of Commerce, stress the need for continuous government measures, including tax incentives, to sustain economic momentum. Tracking indicators such as fuel consumption, hotel occupancy, and VAT collections are crucial for evaluating the program’s success and pushing annual growth further.
Dr. Thanavath Phonvichai, President of the University of the Thai Chamber of Commerce (UTCC), noted that surveys from the UTCC and the government show most recipients plan to use the funds for necessities, while others may invest in tools or pay off informal debts. He expects the stimulus to circulate through the economy two to three times.
The first round of spending is likely to focus on local community markets, with later rounds benefiting local businesses and larger suppliers. This multiplier effect is anticipated to boost economic activity during festive periods such as Loy Krathong and New Year, benefiting the tourism sector in the fourth quarter.
Dr. Thanavath predicts that the stimulus will contribute to GDP growth of 3.8-4.3% in Q4, leading to an overall growth of 2.6-2.8% for the year, exceeding previous projections. He also urged the government to track indicators like fuel consumption, hotel occupancy, and VAT collections to assess the policy’s success. Additionally, he recommended further stimulus measures, such as tax incentives, to push overall growth closer to 3%.
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