Bangkok: Thailand’s ruling party’s flagship 500 billion baht ($14.5 billion) stimulus package is needed to boost the sluggish economy, political heavyweight Thaksin Shinawatra said on Thursday, days after his daughter was elected prime minister by parliament.
Although he has no official role in government, Thaksin is one of the most influential figures in Thai politics and is widely expected to shape the term of his 38-year-old daughter, Paetongtarn Shinawatra.
The leader of the populist Pheu Thai Party was elected on Friday, replacing Srettha Thavisin, who was dismissed by court order.
“We need to stimulate the economy because our country has been growing slowly for a long time,” Thaksin said at an event in the capital Bangkok, explaining the benefits of the alms program, which was a key campaign promise of his party in last year’s election.
The “digital wallet” program, which aims to provide around 50 million Thais with a credit of 10,000 baht via a smartphone application to be spent locally within six months, was scheduled to be launched under Srettha in the fourth quarter.
However, Srettha’s exit had raised doubts as to whether the deal would still work out.
Thaksin’s comments on Thursday suggested that Paetongtarn is likely to go ahead with his plan, which has drawn criticism from economists and the Thai central bank.
Thaksin, a former prime minister who spent 15 years in self-imposed exile before making a dramatic return to Thailand last year, said his daughter’s government would be able to tackle the challenges holding back economic growth.
The government is considering using 145 billion baht from the 2024 budget to distribute alms to 14.5 million people in September, with further disbursements starting in October, he said.
“This will provide an immediate economic boost in September,” he said.
Thailand’s economy grew by 2.3 percent in the April-June quarter compared to the same period last year, exceeding expectations given the political uncertainty following the change of government.
protectionism
In a wide-ranging speech, Thaksin said Thailand should do more to protect the economy from an influx of cheap Chinese products through “small steps of protectionism,” he said.
“We have nothing against Chinese products, but we have to ensure a level playing field,” he said.
Thaksin called for greater coordination between the finance ministry and the central bank to better align fiscal and monetary policies, saying the two sides should be able to talk to each other without compromising institutional independence.
He stressed the urgency of addressing Thailand’s bloated household debt, which stood at 16.4 trillion baht, or 90.8 percent of GDP, at the end of March, making it one of the highest in Asia.
“We need to restructure private household debt,” he said. “The finance minister will have to talk to all the banks about this.”
Thailand needs to reform its agricultural sector to become more competitive and increase revenues and capacity in tourism, a key growth driver. This includes expanding Bangkok’s main airport, he said.
Published August 22, 2024, 3:27 p.m. IS
