Digital wallet in doubt as PM orders stimulus budget overhaul

Deputy Prime Minister Pichai Chunhavajira announced that the government will soon convene a meeting of the Economic Stimulus Policy Committee to review and revise Thailand’s overall economic stimulus strategy. 

The move comes after Prime Minister Paetongtarn Shinawatra tasked Pichai, in his role as committee chairman, with leading efforts to recalibrate the country’s economic plans in light of increasing global volatility and the impact of US tariff measures that have disrupted global trade flows.

The upcoming review is expected to lead to a complete reallocation of stimulus budgets, including a reevaluation of the government’s flagship digital wallet program. 

According to Pichai, who also serves as Finance Minister, the revisions are necessary due to heightened uncertainty in international markets triggered by US tariff policy, which has had ripple effects on global trade dynamics.

Further pressure stems from a recent statement by credit rating agency Moody’s expressing concern over Thailand’s fiscal position. At the same time, the Bank of Thailand (BOT) has formally advised the government to redirect spending toward investment-driven initiatives to help offset potential export vulnerabilities.

“I will not make these decisions alone,” said Pichai. “I’ve informed the committee and relevant agencies that we need to revise our spending strategies, including all ongoing projects such as the digital wallet initiative. Currently, we have a remaining budget of 157 billion baht that must be reconsidered in line with changing economic conditions.”

Pichai added that the new stimulus framework should prioritise domestic investment, particularly job-creating projects like biogas power plants. These facilities, which generate electricity from biomass such as napier grass or corn, could help meet rising energy demand, especially as Thailand prepares for data centre expansion, while also creating employment in rural areas.

The government is also looking to strengthen domestic consumption and upgrade agricultural productivity, with a particular focus on water resource management. This includes expanded investment in potable water, irrigation for farming, industrial water infrastructure, and tourism development, in response to a visible slowdown in foreign tourist arrivals.

Pichai highlighted opportunities to increase Thai exports to China, especially as US-China trade tensions continue. “China still has a significant demand for imported components. If Thai businesses can tap into this market, it would help cushion the overall export performance,” he noted.

In the short term, the government is preparing a new round of soft loans for businesses affected by the US tariff measures. The loan package, which will exceed the scale of Covid-era support, will be interest-subsidised by the Ministry of Finance. Authorities are currently considering funding options through the BOT or financial institutions, as liquidity in the system remains high. Details will be finalised after discussions with private sector stakeholders to identify the most impacted industries.

On capital inflows, Pichai credited recent gains to improved transparency measures in Thailand’s stock market, which have boosted investor confidence. As for the strengthening baht, he said this remains under the careful watch of the BOT.

A source from the Finance Ministry has revealed that the Thai government is facing significant budget limitations in its effort to stimulate the economy. Of the 187.7 billion baht allocated in the mid-year 2025 budget, only 150 billion remains after 37 billion baht was spent on a cash handout program for vulnerable groups and the elderly. 

Expanding that program to cover an additional 18 million people would require another 180 billion baht, well beyond the remaining budget.

Adding to the fiscal strain are 11 other economic stimulus projects requiring additional funding, spanning areas such as domestic consumption, investment, government spending, and exports. As a result, a comprehensive review and reprioritisation of all projects is now underway.

A Government House source noted that the 2025 budget framework offers limited flexibility, as the bill has already passed Parliament. Any budget reallocation would require a Budget Transfer Act, which could lead to delays. Thus, any adjustments will likely be confined to reallocations within ministries, under the discretion of each minister.

Looking ahead to fiscal year 2026, the Cabinet-approved budget stands at 3.78 trillion baht. However, investment spending has been slashed by 7.3% from the previous year, down to 864.08 billion baht—or 22.9% of the total budget, compared to 24.8% in 2025. Debt repayments have slightly increased to 151.2 billion baht, while the central economic stimulus allocation has been set at only 25 billion baht—a sharp drop when compared to the remaining funds in 2025.

Permanent Secretary of Finance Lavaron Sangsnit emphasised that borrowing will be a last resort for the government. He pointed to several other available sources of funding, including the remaining 157 billion baht in the 2025 budget, a 50-billion-baht emergency loan facility (previously used during the Covid-19 pandemic), treasury reserves, and flexible management of the 2026 budget.

The government is aiming to roll out stimulus measures as quickly as possible to positively impact 2025 GDP growth. Officials are seeking to push growth closer to 3%, surpassing the 2.1% currently forecast by the Fiscal Policy Office (FPO). Lavaron also stressed that the upcoming stimulus package will be comprehensive, covering not just consumption but also broader economic sectors.