Analysts have recently expressed concerns about the feasibility of Thailand’s Digital Wallet Policy as a means to revive the economy. While the scheme aims to stimulate growth and increase economic activity, experts caution that it could pose significant risks to the country’s fiscal stability in the medium term.

Naris Sathapholdeja, head of ttb analytics, emphasizes the importance of targeting vulnerable groups or other specific recipients to ensure the efficacy of the program. He argues that private consumption is already growing steadily among certain segments with purchasing power.

While the think tank estimates that the Digital Wallet handout could potentially boost economic growth0.5 percentage points next year, critics highlight the potential consequences for Thailand’s public debt. Currently, the country’s public debt stands at 61.7% of GDP, and implementing this policy could push it beyond many neighboring countries, including Indonesia, the Philippines, and Malaysia.

Experts warn that if the government continues to borrow at a rate of 3-5% of GDP annually, Thailand’s outstanding public debt could reach 70% of GDP or 14 trillion baht2027, placing a significant burden on the country’s finances and limiting future stimulus measures.

High public debt and a lack of fiscal discipline can have adverse effects on the economy. According to KKP Research, these include a decrease in the government’s capacity to implement fiscal policies effectively, increased borrowing costs, and potential capital outflows that may result in currency depreciation and inflation.

To address these concerns, the government must focus on increasing investment to solve structural issues and promote long-term economic growth. Stimulating the economy through monetary injections alone may face challenges due to the country’s competitiveness and other underlying factors, such as high production costs and lower workforce skills compared to neighboring countries.

As the country moves forward with the digital wallet scheme, it is crucial to carefully review its conditions and eligibility criteria. Transparency and thorough assessment will be vital in assessing the potential impact and effectiveness of the policy. Ultimately, a balanced approach that addresses both short-term stimulus and long-term fiscal sustainability will be key to Thailand’s economic recovery.

FAQ:

1. What is a digital wallet policy?

A digital wallet policy refers to a government initiative to provide financial assistance or incentives to individuals or targeted groups through digital platforms or applications.

2. Why are analysts skeptical about Thailand’s digital wallet policy?

Analysts express doubts about the policy’s ability to kick-start the economy and warn of the potential risks it poses to the country’s fiscal stability in the medium term, such as increasing public debt and limited future stimulus measures.

3. How can high public debt impact an economy?

High public debt can decrease the government’s capacity to implement fiscal policies effectively, increase borrowing costs, and trigger capital outflows, leading to currency depreciation and inflation.

4. What measures can Thailand take to ensure long-term fiscal sustainability?

Experts emphasize the importance of increasing investment to address structural issues and enhance the country’s economic growth potential in the long run. This approach can help reduce the burden of high public debt and promote sustainable development.

(Note: The original article is not available for reference, as no source information is provided.)

The Future of Thailand’s Digital Wallet Policy: Assessing the Risks and Challenges .

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