New Thai PM Paetongtarn outlines policies to Parliament as consumer mood drops

BANGKOK – Thai Prime Minister Paetongtarn Shinawatra on Sept 12 outlined her government’s policy agenda in Parliament, headlined by plans to give away 450 billion baht (S$17.4 billion) in handouts to jump-start South-east Asia’s second-largest economy.

Political newcomer Paetongtarn’s Cabinet was

sworn in earlier in September

after she won the backing of Parliament to become Thailand’s youngest premier following the

shock removal of predecessor Srettha Thavisin

by a court decision. 

The policies largely continue ally Mr Srettha’s agenda and that of their populist Pheu Thai Party, including debt restructuring and legalising casinos to draw in investment and more tourists. 

Ms Paetongtarn told Parliament her government was facing challenges, including structural economic problems, and that it would act with urgency to stimulate growth.

“If there are no financial and fiscal measures to support economic growth, it is expected that the country’s economic growth rate will not exceed 3 per cent per year,” she said.

This would result in the public debt level approaching the ceiling of 70 per cent of gross domestic product in 2027, she said. Public debt stood at 63.74 per cent of GDP at the end of July.

“Therefore, it is a great challenge... the government must urgently restore the country’s economy to quickly grow strongly again,” she said.

While she highlighted the signature plan for a “digital wallet” handout of 10,000 baht to 50 million people, some of which Ms Paetongtarn has previously said will be given in cash, there were no updates on how or when it would be rolled out.

The government said earlier this week it would distribute 145 billion baht of the programme to support vulnerable groups later in September.

The scheme has been criticised by economists and former central bank governors as fiscally irresponsible, which the government rejects. It has struggled to find sources of funding.

The government insists the policy is necessary to energise the economy, which the central bank expects to grow by just 2.6 per cent in 2024, up from 1.9 per cent in 2023 but far adrift of most regional peers. 

Consumer confidence dropped for a sixth straight month to a 13-month low in August, a survey showed on Sept 12.

Ms Paetongtarn, 38, made her debut appearance in Parliament as Thailand’s second female prime minister. She is the fourth member of the Shinawatra extended family to hold the top job. 

Among those was her father, billionaire Thaksin Shinawatra, Thailand’s most influential and divisive politician over the past two decades, who has backed the stimulus plan and is a key figure behind her Pheu Thai party. REUTERS