Will the Srettha government pursue debt-fuelled growth?

[webfact]

 

The Pheu Thai-led coalition government faces mounting pressure to abandon its populist policy of handing out 10,000 baht to all citizens aged 16 years and above under its digital wallet scheme. 

 

A few weeks ago, 99 academics had issued a signed statement opposing the scheme that would cost as much as 560 billion baht, even as the government was still running a fiscal deficit and burdened with rising public debt. 

 

The academics argued that the money could be spent more wisely instead of wasting the huge amount to boost private consumption in the short run. 

 

Despite severe criticism from the scholars, Prime Minister Srettha Thavisin remains defiant. He is urging government supporters to come out in defence of the scheme.

 

In response, some government supporters did echo the administration’s narrative that it would boost the economy and support low-income groups.

 

Meanwhile, the National Anti-Corruption Commission (NACC) has established a committee to look into the matter, to see whether it could lead to severe corruption as in the rice-pledging scheme of the 2011 Pheu Thai government.  

 

Full story: Thai PBS 2023-10-26

 

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[OneMoreFarang]

They will do what is good for them personally and their criminal owner.

Thailand? Who cares? 

[Will B Good]

Yes....they have nothing to lose.

 

If it works they might just win the next election.....doubtful.

 

If it turns the economy into a crock of **** they can walk away and leave the  MFP to sort it out.

[hotchilli]

2 hours ago, webfact said:

In response, some government supporters did echo the administration’s narrative that it would boost the economy and support low-income groups.

For about 5 seconds... it will do nothing for the GDP...

Out with one hand back in with another.

[hotchilli]

2 hours ago, OneMoreFarang said:

They will do what is good for them personally and their criminal owner.

Thailand? Who cares? 

Not me, I'm only a long term guest.

[Robin]

Populist?  Nothing Taksin did came close to this give away, and nobody will benefit.  There are a hundred ways this money can be diverted from its original purpose and into corrupt pockets.  Every one will be used to make sure that only Srettha's supporters benefit.

[OneMoreFarang]

1 minute ago, Robin said:

Populist?  Nothing Taksin did came close to this give away

And who do you think came up with this idea? Thaksin's daughter? 555

[sammieuk1]

Give the bill to Putin and XI our new bestest buddies 🤔

[NoshowJones]

5 hours ago, hotchilli said:

Not me, I'm only a long term guest.

Guest???????

[retarius]

Yes they will pursue debt based growth, and like the west it will sink them, except Thailand hasn't had the period of wealth and prosperity that in the west preceded the fall. Thailand's fall will be dramatic and quick. 

[jonclark]

So the plan in simple terms is basically to max out the credit card. And then hope you can keep up with repayments...? 

[Dogmatix]

10 hours ago, retarius said:

Yes they will pursue debt based growth, and like the west it will sink them, except Thailand hasn't had the period of wealth and prosperity that in the west preceded the fall. Thailand's fall will be dramatic and quick. 

Not sure if they really can borrow enough. Government debt already over 60% of GDP and consumer debt is over 80%. Along comes the roadshow clown in red sox with a plan handed to him by some joker to borrow another 2.7% of GDP to generate incremental GDP of 2.7%. Wow this is magic he said. Let’s do it. What could possibly go wrong?

 

But what do we do after that? Keep on begging low end tourists to come from the motherland. They will come to our rescue.

Edited October 26, 2023 by Dogmatix

[retarius]

58 minutes ago, Dogmatix said:

Not sure if they really can borrow enough. Government debt already over 60% of GDP and consumer debt is over 80%. Along comes the roadshow clown in red sox with a plan handed to him by some joker to borrow another 2.7% of GDP to generate incremental GDP of 2.7%. Wow this is magic he said. Let’s do it. What could possibly go wrong?

 

But what do we do after that? Keep on begging low end tourists to come from the motherland. They will come to our rescue.

I agree about the borrowing, for every borrower there has to be a lender. It was easy when the GDP growth closer to 10% or so, not so easy for a low growth economy hooked on promotional ideas instead of sound business strategies. The other side of the coin is the interest rates. Anyone lending to Thailand (who is sane) will want a premium for the high risk here. The problem with high interest rates is that it kills of poor business ideas....paying back a 2% loan on a new business when national GDP growth is 6% is a much lower risk than an 8% loan when your national GDP growth is 3%. And who is going to pay back all the loans for those cannabis stores and businesses that have just opened?

[Dogmatix]

10 hours ago, retarius said:

I agree about the borrowing, for every borrower there has to be a lender. It was easy when the GDP growth closer to 10% or so, not so easy for a low growth economy hooked on promotional ideas instead of sound business strategies. The other side of the coin is the interest rates. Anyone lending to Thailand (who is sane) will want a premium for the high risk here. The problem with high interest rates is that it kills of poor business ideas....paying back a 2% loan on a new business when national GDP growth is 6% is a much lower risk than an 8% loan when your national GDP growth is 3%. And who is going to pay back all the loans for those cannabis stores and businesses that have just opened?

The US just generated 4.9% GDP growth in 3Q and Thailand, a developing country can hardly get to .3% now.  We have this idiotic nominee PM in pink socks running about desperately begging Chinese tourists to come and foreign companies to invest and trying to borrow money to buy GDP growth, as if you can buy anything with other people's money.

[sidneybear]

On 10/26/2023 at 3:05 PM, OneMoreFarang said:

They will do what is good for them personally and their criminal owner.

Thailand? Who cares? 

Correct. They'll borrow to fill their pockets as fast as they can.