New Thai PM to push ahead with cash stimulus to revive economy

Thailand’s newly-appointed Prime Minister Paetongtarn Shinawatra has pledged to advance a $14 billion cash stimulus initiative aimed at rejuvenating the nation's economy. As she and her 35-member cabinet take office, Paetongtarn is set to present a comprehensive policy statement to parliament next week, outlining the cash handout details and broader strategies to boost tourism and attract foreign investment.

Shinawatra has committed to implementing a controversial $14 billion cash stimulus plan, aimed at revitalizing the country’s sluggish economy and addressing high levels of household debt, Caliber.Az reports via foreign media. 

Following her swearing-in and the finalization of her cabinet, Paetongtarn is expected to detail her government's policies to parliament next week, including the specifics of the long-anticipated cash distribution and initiatives to bolster tourism and foreign investment.

The proposed digital wallet scheme will provide 10,000 baht ($296) each to approximately 50 million Thai adults, with an initial phase set to launch in September covering around 14.5 million individuals, including 1 million with disabilities. The new leader emphasized that the program will be conducted in compliance with the law.

At 38, Paetongtarn is Thailand's youngest prime minister and was elected last month to lead a coalition government formed by her Pheu Thai party and supported by several conservative groups. She succeeded Srettha Thavisin, who was removed from office due to an ethical breach.

In addition to advancing the cash handout, Paetongtarn has urged her cabinet to continue with some of the previous administration's economic policies, including efforts to stimulate economic growth, boost tourism, improve farm goods prices, and address flood issues.

Thailand’s economy is projected to grow by just 2.5 per cent this year, lagging behind regional neighbors like Indonesia and Malaysia. With persistent public and household debt, slow exports, and high living costs, the economy has been struggling under a military-backed government for the past decade.

Paetongtarn, the youngest daughter of former Prime Minister Thaksin Shinawatra, might also clarify her administration’s stance on regulating the cannabis industry and legalizing casinos to attract affluent tourists. Although she assured that Thaksin would not interfere in her governance, she might seek his advice occasionally.

The new prime minister faces the challenge of maintaining unity within her diverse coalition and reassuring investors of her ability to attract foreign investment in high-tech sectors while supporting a fragile economic recovery. Financial markets have reacted positively to the political stability, with the SET Index rising nearly 11 per cent since her nomination, and the baht strengthening by 4% to its highest level in over a year.