Thailand
Thailand: Rate cut better than cash payout: expert
More cuts in the Bank of Thailand’s benchmark rate will be a more powerful option for stimulating the economy than the government’s 1,000-baht cash handout scheme, said an expert.
The cash handout scheme will only help boost the economy in the short term, but won’t contribute much to annual gross domestic product (GDP), said Assoc Prof Yuthana Sethapramote, a lecturer with the School of Development Economics at the National Institute of Development Administration (Nida).
Slashing interest rates appears to be the best course of action for long-term economic stimulation, he said.
It should wait a few months to assess the impact on the scheme before embarking on the second phase, he said.
The cash handout and rebate are part of a 316-billion-baht stimulus package aimed at boosting economic growth to at least 3% this year.
The cash handout needs to be spent using the Pao Tang app at participating shops in specified provinces within two weeks, while the 15% rebate can be spent in any province.
Neither giveaway can be used in the recipient’s home province. Recipients must spend from Sept 27 to Nov 30 to take advantage of either payment.
The scheme’s registration, which is open from Sept 23 to Nov 15 or until the 10-million-recipient quota is full, is limited to 1 million recipients a day.
Charnkrij Dejvitak, an assistant to a Prime Minister’s Office minister, said he took a trip to Bang Nam Phueng water market in Samut Prakan’s Phra Pradaeng district to observe how people are spending the money.
As most people tended to shop with only the money given to them in their No.1 electronic wallet in the Pao Tang application, they will next be encouraged to top up the application’s No.2 wallet with their own money and spend it at the more than 170,000 shops nationwide to gain the 15% cash rebate as well, he said.
Finance Minister Uttama Savanayana has also visited vendors at markets in Rayong and Chon Buri. They reported on Sunday a 30% rise in sales from shoppers using the cash, said Thanakorn Wangboonkongchana, a spokesman for the Palang Pracharath Party.
Source: https://www.bangkokpost.com/business/1766414/rate-cut-better-than-cash-payout-expert