The general economy of Thailand is expecting to grow big when the government puts into action its Digital Cash Stimulus Package . The Thai Chamber of Commerce has also stated that there relatively positive view on what this may do for the GDP in Thailand. More specifically, the transparent cash stimuli is to have the most profound impact on local spending for goods and services.
Digital cash stimulus is among the measures to support the Thai economy given shocks from the global markets. The purpose of direct injections of funds is to stimulate domestic demand and boost SMEs in the market as they are the main driving force for Thailand’s economy. The Chairman of the Thai Chamber of Commerce has stressed that this approach is effective, as it focuses on those parts of an economy that require boosting.
An assessment of the effects of the program on different parts of the economy has however been observed by economists as the program continues to roll out. Consumer discretionary, information technology, communication services, and healthcare are likely to benefit the most as recipients of the stimulus spend the money. These amounts of money are expected to stimulate other related villages and may lead to job creation and development of other businesses.
This stimulus is timely as Thailand is seeking to become a hub for EVs in the SEA region after the adoption of the Thailand junta EV road map announced in 2017. With Indonesia, this country gradually becomes a production center for EVs in SEA region. It is estimated that this development will require capital investment and help to provide new employment in the automobiles industry. The government’s latest announcement of incentives for investment and reduction of excise taxes on hybrid vehicles from fiscal year 2028 to fiscal year 2032 also proves its determination of Thailand to turn into a suitable suitable country for this increasing market.
Nevertheless, the stimulus program and calls for EV production have their hauls back too. This has posed a poser to the government because, while improving spending, inflationary forces which could arise have to be considered in the provocation of economic growth. Furthermore, the threat of Chinese EV makers has emerged in Thailand to some extent as they sell their vehicles at much lower prices many early buyers have lodged complaints and fair competition.
Policies in the financial sector are still being managed conservatively by the Bank of Thailand: Monetary Policy. Recent policy rate remains at 2.5 % (BoC 2013) and continues to stimulate growth as it tries to dodge inflation threats. It becomes important as Thailand is experiencing its political and economic reality and facing possible consequences of decisions made by other large central banks.
Another important issues that attract attention of companies and investors are concerned with performance of Thai baht. It has been noted that strength in this currency over the recent period was a potential problem to export as well as the tourism industry which form a key segment of Thailand’s economy. On the one hand, a higher value of baht seems to reduce imports and inflation but on the other hand, this has the effect of making Thai products and service expensive to the international buyer as well as tourist.
As the Thailand countries keeps on exercising the economic policies, the government is equally solving other business concerns. Post-2014 policies of regulating vending in Bangkok and allowing only Thai citizens on welfare and limiting employment of migrants are recent witnesses to the continuous regulation of the informal sector towards formal businesses.
Thailand’s efforts will come under the crucial test in the coming months as it tries to foster economic growth. By establishing the digital cash stimulus program, promoting the EV manufacturing, and persistently providing supports to SMEs and controlling the currency especially after COVID19 Thailand is heading to improve its economy in South East Asia. The business community is also optimistic open to change accompanying the increase in package tours while bearing in mind the challenges they present to the country’s economy.