The government’s “Khon La Khrueng Plus” co-payment scheme, worth 44 billion baht, is expected to bolster GDP in the fourth quarter, said Finance Minister Ekniti Nitithanprapas.
The cabinet on Tuesday approved the budget for the scheme, which will be effective from Oct 29 until the end of this year, with the aim of preventing the economy from becoming trapped in contraction in the current quarter, the minister said.
Mr Ekniti, also a deputy prime minister, said the cabinet’s approval of the scheme reflects the government’s policy as declared to parliament, and recognises the urgent need to stimulate the economy.
The scheme is intended to increase household income and reduce expenditures, thereby enhancing people’s purchasing power for everyday consumption, he said.
This is especially important as the Thai economy faces a risk of contraction and slowdown in the fourth quarter.
The Khon La Khrueng Plus initiative is positioned as a flagship measure, complementing the recent top-up in welfare card balances that the cabinet also approved last week, to promote a more distributed and lasting economic recovery.
According to Mr Ekniti, Khon La Khrueng Plus will provide 20 million entitlements, under which the government will contribute half of the spending.
The aim is to aid small and micro businesses by stimulating consumer demand. Over the medium to long term, the programme also targets tax-registered citizens, who will receive 2,400 baht each, as well as support for local vendors via technology and training to reduce costs and modernise trade.
“The government emphasises that this scheme is intended to act as the engine to drive Thailand’s economy and prevent a negative trajectory,” he said.
Unlike the previous version [for persons aged 18 and above], eligibility in this round is extended to all persons 16 and above, recognising that younger generations have purchasing power and engage in online commerce.
“The government will also raise its daily subsidy contribution from 150 to 200 baht, thereby increasing purchasing power and driving short-term economic stimulus.
“Meanwhile, subsidies for those in the tax system will rise to 2,400 baht, in contrast to the general subsidy of 2,000 baht. The scheme will run from Oct 29-Dec 31, and those who have registered but not yet used their entitlement must make their first transaction by Nov 11 to retain their eligibility,” Mr Ekniti said.
He said the purpose of the scheme is to help ease living expenses for 20 million people, requiring citizens to also contribute 44 billion themselves — thereby injecting a total of 88 billion into the economy.
Furthermore, at the previous cabinet meeting, the government also approved top-ups for 13.4 million welfare card holders, 1,700 baht each, funded by another 23 billion baht budget allocation, Mr Ekniti said.
This means that by year’s end, more than 100 billion baht will have been mobilised to stimulate the economy, which is expected to raise GDP by an additional 0.3-0.4%, he said.
While economic growth was forecast at 0.3 % for the quarter, these measures could see it double that target, he said.
“The government will sequentially roll out stimulus measures each week to push the Q4 GDP to expand by at least 1%,” he said.