Digital wallet project adds to Government's financial strain

[snoop1130]

 

The government's financial burden, displayed as the percentage of interest to its expected revenue, is predicted to increase from the current 8% to 11% next year. This jump is largely due to the introduction of the government's main digital wallet giveaway program.

 

A confidential individual from the Finance Ministry has stated that the existing 8% rate is consistent with an A rating according to international credit rating agency standards. A leap to 11% would lead to a drop to BBB+ credit rating, matching the nation's present sovereign credit rating.

 

In 2019, the government's debt-to-revenue ratio was a manageable 6%, thanks to the efficient management of borrowing costs by the Public Debt Management Office. However, the pandemic in 2020-2021 caused a sudden change. The government approved two emergency decrees allowing borrowing up to 1.5 trillion baht to alleviate the financial effects of the pandemic. This decision pushed the ratio to a risky 8%, just under the 10% limit set by the government management framework.

 

The government plans to finance its digital wallet project, estimated to cost 500 billion baht, with funds from the fiscal budgets of 2024 and 2025. This includes funds from Section 28 of the State Fiscal and Financial Discipline Act.

 

Additionally, the government has decided to increase the budget deficit for the fiscal year 2025 by 152 billion baht. This move will require more state borrowing to offset the deficit, totaling 865 billion baht or 4.42% of the GDP. This would increase the government’s financial burden from 8% to 11% in 2025, as per the source.

 

Regardless of these numbers, the government’s public debt management is believed to be within the financial discipline framework. The State Fiscal and Financial Discipline Committee, chaired by Prime Minister Srettha Thavasin, has stated that the government's debt-to-revenue ratio should not exceed 35%. As of September last year, this ratio was at 26%.

 

In addition, the percentage of debt in foreign currency compared to total public debt should not be more than 10%. As of September last year, it was only 1.4%. Similarly, the ratio of foreign currency debt to revenue from exports of goods and services should not exceed 5%. It was a mere 0.05% as of last September.

 

As of February this year, the total public debt was at 11.3 trillion baht, equal to 62.5% of the GDP.

 

An updated medium-term fiscal plan released in January showed that the government's debt repayment budget compared to the expenditure budget has increased annually. It was at 10.5% for the fiscal year 2023, 11.0% for the fiscal year 2024, and is likely to steadily rise to 13.3% by 2028.

 

File photo for reference only. Courtesy of Google

 

-- 2024-05-06

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[ozz1]

That's if still goes ahead and don't forget they will make 7 percent on all purchases if it does happen    time to drain the gold reserves or cut the military budget we know that's not going to happen

[Ben Zioner]

2 hours ago, ozz1 said:

That's if still goes ahead and don't forget they will make 7 percent on all purchases if it does happen    time to drain the gold reserves or cut the military budget we know that's not going to happen

Time to tax foreign pensions..

[ikke1959]

They should call off the whole idea of the digital wallet 10k.. It is too expensive and it will harm more than do good.. I think that people with in income of 45k or 400k in an bankaccount don't need it, but the poor, elderly and disabled would be better of if they got some money.  It would be much cheaper and also to use the money to increas the daily wage from 350 THB to 500 THB.. That would do much more good to the economy than 10k spending in a radius around your house and if for groceries it has no benefit at all..Only the shopkeepers of 7/11, Lotus's or CJ or whatever..Don't borrow money to pay off loans, as it will not work

[hotchilli]

8 hours ago, ikke1959 said:

They should call off the whole idea of the digital wallet 10k.. It is too expensive and it will harm more than do good.. I think that people with in income of 45k or 400k in an bankaccount don't need it, but the poor, elderly and disabled would be better of if they got some money.  It would be much cheaper and also to use the money to increas the daily wage from 350 THB to 500 THB.. That would do much more good to the economy than 10k spending in a radius around your house and if for groceries it has no benefit at all..Only the shopkeepers of 7/11, Lotus's or CJ or whatever..Don't borrow money to pay off loans, as it will not work

The elites used this digital wallet as a vote buying scam, let them fund it... combined they have more than enough resources.

[2baht]

5 minutes ago, hotchilli said:

The elites used this digital wallet as a vote buying scam, let them fund it... combined they have more than enough resources.

Unfortunately they are takers, not givers! 

[Thingamabob]

The 'giveaway' promise was a bribe to attract votes. It will use government funds, ie tax-sourced money, to enable its' implementation. Utterly ridiculous, shameful even, if anyone cares to seriously think about it.

[RandolphGB]

This was nothing but a bribe to get votes. It will bankrupt the country. Typical Taksin. 

[brianthainess]

Thailand is broke, and needs to borrow money. . . .

[kingstonkid]

10 hours ago, ikke1959 said:

They should call off the whole idea of the digital wallet 10k.. It is too expensive and it will harm more than do good.. I think that people with in income of 45k or 400k in an bankaccount don't need it, but the poor, elderly and disabled would be better of if they got some money.  It would be much cheaper and also to use the money to increas the daily wage from 350 THB to 500 THB.. That would do much more good to the economy than 10k spending in a radius around your house and if for groceries it has no benefit at all..Only the shopkeepers of 7/11, Lotus's or CJ or whatever..Don't borrow money to pay off loans, as it will not work

Thaksin's challenge is that if he does not do it, they will be facing a very, very hard charging MFP.

Consider that the PTP has made promises every election and none of them have helped people

 

remember tablet for every student

rice pledge

triple thai farmers' income

economic growth

20 million highly skilled workers

20,000 baht guaranteed salary to all university grads

free healthcare for all including bedridden patients 

improve the country's financial situation

higher minimum wage 

amending the constitution

 

 

How are they doing so far?

 

[newbee2022]

16 hours ago, snoop1130 said:

Regardless of these numbers, the government’s public debt management is believed to be within the financial discipline framework.

Belief is everything in Thailand 🙏

 

[2baht]

28 minutes ago, newbee2022 said:

Belief is everything in Thailand 🙏

 

Belief or BS?

[ikke1959]

1 hour ago, 2baht said:

Belief or BS?

 

1 hour ago, 2baht said:

Belief or BS?

Is that not the same??