Five state-run banks to cut their budget for digital wallet scheme

The government plans to secure an additional 35 billion baht for its flagship economic stimulus digital wallet scheme by getting five state enterprises to adjust their budget for fiscal year (FY) 2025 to free up the funds, a Government House source said on Wednesday.

The five state-run banks expected to make budget cuts are:

• Bank for Agriculture and Agricultural Cooperatives – 31.32 billion baht
• Government Savings Bank – 2.68 billion baht
• Government Housing Bank – 592.15 million baht
• Small and Medium Enterprise Development Bank of Thailand – 330.38 million baht
• Export–Import Bank of Thailand – 72.31 million baht

The scheme is a key election promise of the ruling Pheu Thai Party to ramp up the country’s economy by boosting domestic spending. Under the scheme, Thai citizens aged 16 years and above, whose annual income is less than 840,000 per annum and who do not have 500,000 baht in bank deposits, will receive 10,000 baht per person as a digital handout to spend at local businesses.

The government estimates the campaign would need a budget of 450 billion baht, which will come from various sources.

• 122 billion baht will come from the Additional Budget Expenditure Act for FY2024, which passed Parliament readings and is now waiting to be enacted.
• 152.7 billion baht will come from the central budget for FY2025, with the draft currently being reviewed by the House of Representatives’ ad hoc committee.
• 40 to 50 billion baht will be tapped from the FY2024 central budget for emergency expenses. However, this portion of the budget must be approved and disbursed within September, before the fiscal year ends.

The source added that the government under new Prime Minister Paetongtarn Shinawatra is looking into options to adjust the scope and criteria of the scheme to make it fit available budgets.

Analysts have suggested that one suitable approach would be to limit the recipients to only those below the poverty line and in vulnerable groups – estimated at 20-25 million people. Funding for the scheme in that case would cost less than 250 billion baht. This approach would also be in alignment with the suggestion of the Bank of Thailand.