Paetongtarn Shinawatra was sworn in as Thailand's Prime Minister on September 7, 2024, marking her as the youngest individual to assume this role at 38 years old. Her appointment follows the dismissal of former Prime Minister Srettha Thavisin by the Constitutional Court due to ethical violations, prompting a significant shift in the political landscape [d463b318].
In her inaugural address, Paetongtarn announced a substantial cash stimulus plan worth US$14 billion aimed at revitalizing the economy, which is currently grappling with low growth and high household debt. The initiative will provide 10,000 baht (approximately $275) to 50 million adults, with 14.5 million expected to benefit in the first phase [3de48b04]. This cash handout is part of her broader strategy to stimulate economic activity and improve living standards across the nation.
Recently, Prime Minister Paetongtarn announced the disbursement of 145 billion baht under the 'digital wallet' scheme, targeting 2.1 million people and 12.4 million state welfare card holders. This initiative aims to create a 'major economic whirlwind' to enhance businesses and improve livelihoods. The first payments of 10,000 baht cash benefit will be transferred to 14.5 million disabled individuals and welfare card holders from now until the end of September 2024 [eb39dd83].
Despite her ambitious plans, the Thai economy is projected to grow only 2.5% this year, lagging behind its regional neighbors. This slowdown is exacerbated by high household debt nearing 90% of GDP and the closure of nearly 2,000 factories last year [490732d2]. Paetongtarn's administration is also tasked with addressing the concerns surrounding the funding sources for the cash handout, which has drawn criticism for its potential impact on the national budget [47c9952c].
The government is currently reviewing the payout details of the cash handout amid concerns over potential legal challenges. A parliamentary discussion on a proposed US$102 billion budget, which includes funding for the cash handout, is also underway, with voting scheduled for September 5, 2024 [47c9952c].
One of the most controversial initiatives from her predecessor was the proposed Digital Wallet scheme. While this initiative is intended to stimulate the economy, critics warn that it could worsen the fiscal deficit and inflation, which are already significant concerns in Thailand's economic landscape [490732d2].
In addition to the cash handout, Paetongtarn aims to continue previous policies to boost tourism and agriculture, sectors that are vital for economic recovery. The tourism industry, which accounted for 11.5% of GDP in 2019, is showing signs of recovery, with 21 million visitors recorded in August 2024 alone [490732d2].
Political analyst Thitinan Pongsudhirak has expressed concerns that ongoing political instability could hinder economic recovery efforts. As Paetongtarn embarks on her premiership, navigating the tensions between her family's allies and conservative elites will be crucial for her administration's success [313b2c89].
Pichai Chunhavajira, recently appointed as Finance Minister and Deputy Prime Minister, is expected to play a vital role in addressing these economic challenges. His background in the energy sector positions him well to implement strategies aimed at economic recovery [9acc21ab][f8b3e0e2].
In addition to domestic challenges, Paetongtarn may also seek foreign investment, particularly from China, to fund ambitious infrastructure projects, including a proposed land bridge project aimed at enhancing marine shipping routes in Asia. This project, estimated to cost at least $28.6 billion, is seen as a potential alternative to the shelved Kra canal [3c86696b].
As she takes on her new role, the path ahead for Paetongtarn is fraught with challenges, but her leadership may prove pivotal in steering Thailand towards a more stable and prosperous future amidst the current economic and political uncertainties.