The Bank of Thailand (BOT) is reviewing the new government’s financial policies, particularly the Pheu Thai Party’s proposed 10,000-baht digital handout scheme, which could contribute to around 3 percent of GDP growth next year.
BOT’s Economic and Policy Department Director Sakkapop Panyanukul said that the central bank is waiting for further details about the handout scheme and other key financial policies before making a financial forecast of the Thai economy next year. However, based on a one-time cash transfer multiplier model, the central bank predicts that the scheme will require a total budget of about 500 billion baht, which will add around 3% to GDP growth in 2024.
Sakkapop stated that the central bank might revise its 2023 growth forecast to 3.6% due to the global economic slowdown and China’s slow recovery. However, despite the contraction in Thai exports for the second quarter of this year, domestic demand has been increasing and could support economic growth alongside the revitalization of the tourism sector. He added that even though the consumer sentiment index for August was lower than for July because of concerns about the formation of a new government, the index should improve for the next three months after the new government is established.
The director stated that the number of foreign tourists continued to rise after seasonal adjustments, which boosted activity in the service industry. Foreign arrivals surged to 2.49 million in July, up from 2.24 million the previous month, primarily due to tourists from China, Malaysia, Europe, and Russia. The central bank previously forecast a 3.8 percent growth for 2024. (NNT)