“Digital Wallet” payments just welfare to ease cost of living, says economist

The 10,000 baht benefits paid under the Digital Wallet scheme are just a short-term measure to help ease the cost of living for most recipients and their families and will have a minimal impact on the economy, according to Professor Praipol Koomsup, former dean of the Faculty of Economics at Thammasat University.

As long as the scheme is extended to phase three, he said that the government’s objective, to boost the economy, will be further off the mark.

“It is just a welfare fund,” he said, as he urged the public not to expect too much from the scheme.

According to the Finance Ministry’s assessments, the first phase of the scheme, which cost 145 billion baht for 14.5 million disabled people and state welfare card holders, helped boost growth by just 0.3%. The second phase, which cost 30 billion baht for three million people over 60, increased growth by just 0.1%.

The Finance Ministry is yet to assess the effects of the third phase, payments from which are yet to be made, but it will cost the taxpayer about 27 billion baht.

Several small store owners have said that they have not felt an improvement in the economic situation since the launch of the first two phases of the Digital Wallet scheme.

A vendor in the Huai Khwang area of Bangkok said most recipients of the money spent it on settling their debts, instead of buying goods as expected by the government. Another complained that it took her some time to get refunded after accepting payments under the scheme.

KKP Research warns that government over-spending on economic stimulus schemes will increase public debt to 70% of GDP in the next two years, as the government is expected to face a budgetary deficit this year, estimated at about 410 billion baht.