Digital wallet rules reduce the fear of debt

Pamphlet to focus on low income people

The announcement of three disqualifications for the 10,000-baht digital wallet grant eased concerns about the country’s public and household debt, but could negatively affect economic growth and domestically concentrated stocks, analysts said.

Amid concerns that the costly digital wallet scheme will risk the country’s financial position and credit rating, Deputy Finance Minister Julapon Amornoiwat said yesterday that the scheme would focus on low-income earners, capping the monthly salary of eligible participants at 25,000 baht. or 50,000 baht limit.

A subcommittee meeting also recommended limiting the handouts to the 16 million people who have government welfare cards or who meet certain measures of wealth based on income or savings. If limited to welfare card holders, the project would cost the government 160 billion baht, down from the initial estimate of 560 billion baht.

Asia Plus Securities (ASPS) said the lower funding required for the digital wallet initiative will ease concerns about the public debt-to-GDP ratio, which stands at a high level of 61.8%, while household debt is more than 90%. % of GDP.

However, limiting eligibility for digital wages could reduce the country’s GDP growth forecast for 2024, which is currently expected to fall short of the Bank of Thailand’s target of 4.4%.

The adjustment could also create negative sentiment for stocks expected to benefit from the plan, particularly in the banking, retail, travel, transportation and food sectors, ASPS said in a research note on Thursday.

Finansia Syrus Securities said the subcommittee’s proposed options to reduce the number of people eligible for digital grants would reduce the project budget to 490-150 billion baht.

Krungsri Capital Securities (KCS) agreed that guidelines to distribute money to households earning less than 50,000 baht were a positive move and would help ease market concerns about growing public debt and Thai bond yields.

According to Krungseri Research study recommendations, the digital wallet pamphlet should be given to people whose monthly expenses are higher than their income, people who are in debt, and those whose household income is less than 50,000 baht.

The think tank said: debt-free people with a monthly household income of less than 10,000 baht do not have enough purchasing power and should also be included.

“Distributing money among these groups helps to recirculate money in the economy much more than leaving it to those who don’t have financial problems,” KCS said.

Transparency in digital wallet policy regarding the classification of target groups for wages will affect stocks in the retail, banking and leasing sectors, the brokerage said.