Economists have played down the impact of the long-awaited second phase of the government’s latest co-payment plus scheme in propping up the subdued economy, citing a limited budget, while goods prices are expected to rise substantially from the second quarter due to elevated oil prices.
Under the Thai Help Thai Plus scheme, the flagship consumer spending stimulus of the Bhumjaithai-led government, the package could offer a 1,000 baht per month subsidy on consumption for four months. The programme to “ease citizens’ financial burden” will feature a 60:40 split of approved spending by consumers, with the government paying 60%.
While the overall budget remains unknown, Poonyawat Sreesing, senior economist at Siam Commercial Bank’s Economic Intelligence Center (SCB EIC), said the scheme is unlikely to generate substantial effects in boosting the economy as the available budget “seems limited”.
Registration via the Pao Tang application is expected next month, with implementation starting from June 1 for an estimated 20-30 million recipients. The co-payment plus benefits could be distributed over a few months given the limited government budget, he said.
“Greater impacts from the Middle East war would prevail in the second and third quarters of this year, pushing goods prices, transportation costs, and fuel tariffs to rise substantially. Consequently, we anticipate that this would prompt consumers to spend less, even though they receive giveaways from the government,” said Mr Poonyawat.
The government has signalled it may raise the public debt ceiling and issue an emergency decree for additional borrowing to mitigate the uncertain impact of the conflict in the Middle East.
Even though Moody’s Ratings last week upgraded the outlook for the Thai government to stable from negative, SCB EIC warned that in the second half of the year it remains vital to closely monitor Fitch’s outlook, which downgraded its outlook for Thailand to negative in 2025.
Thanadet Rangsithananont, director of research at Pi Securities, said that with an estimated cost of 84-88 billion baht, the Thai Help Thai Plus stimulus is expected to add only 0.2% to Thai GDP.
“The stalled peace talks between the US and Iran will keep global oil prices elevated, pushing impacts to spread further into the second quarter and beyond,” he said.
SCB EIC, meanwhile, projects that the global economy will slow to 2.5% growth this year from 2.9% in 2025, pressured by conflicts in the Middle East and higher energy and raw material costs.
Global monetary and fiscal policies are facing increasing constraints due to accelerating energy prices and a resurgence of inflation, the think-tank noted.