The Bank of Thailand (BOT) has been doubling down on its opposition to the Thai government headed by Prime Minister Srettha Thavisin and its plan to give almost $14 billion in cash to almost all of its adult citizens to revive the country's economy. Instead, it suggests focusing on Thailand's destitute.
Bloomberg quoted Bank of Thailand Governor Sethaput Suthiwartnarueput, who said in an interview Tuesday (June 18) that stimulating demand across the board was unnecessary despite the rate of private consumption expansion easing from 7% last year to 4% this year.
The Srettha government's cash stimulus scheme, described as a digital wallet program, currently promised THB 10,000 ($273) each in cash to 50 million Thais aged 16 and above. Sethaput said that it should only cover 15 million welfare cardholders.
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Bank of Thailand's Reservations on Cash Stimulus
The BOT has long made it known that they oppose any stimulus package that does not benefit the poorest in Thai society. Sethaput's comments were bound to rattle Srettha's cabinet and only continue the feud between the central bank and government over how to handle the economy after around a decade of turmoil under a military junta.
While the tourism industry steadily recovered after the pandemic due to private consumption, vulnerable and lower-income households still struggle to recover, Sethaput added.
Aside from the central bank, Srettha's government faced opposition over how it would be funded after naming the digital wallet scheme a major election pledge of the ruling Pheu Thai Party.
Reuters earlier reported last week that Thai Finance Minister Pichai Chunhavajira was more worried about people's access to credit than interest rates.
The government aims to increase GDP by at least 3% this year.
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