Thailand’s government has abandoned its flagship digital wallet program, which promised a 10,000 Thai Baht (US$280) handout to millions, redirecting over 157 billion Thai Baht (US$4.4 billion) to a new economic stimulus package. The decision, announced on May 16, 2025, comes as global trade tensions, particularly new U.S. tariff measures, threaten Thailand’s export-driven economy. With key sectors like manufacturing and supply chains at risk, the move signals a pivot to more targeted interventions amid fears of a broader economic downturn.
From Handouts to Crisis Response
The digital wallet initiative, initially a cornerstone of the government’s populist agenda, aimed to inject cash directly into the hands of citizens, including 2.7 million young people aged 16-20, at a cost of 27 billion Thai Baht (US$756 million). However, escalating global economic uncertainties have forced a rethink. Deputy Prime Minister and Finance Minister Pichai Chunhavajira confirmed that the funds will now support a comprehensive stimulus plan to cushion businesses battered by international trade disruptions.
“Despite the challenges, the government remains committed to achieving GDP growth of over 3% in 2025” said Pichai. He highlighted tourism and real estate as priority areas for new measures, sectors seen as vital to stabilizing the economy in the face of potential risks over the next one to two years. 
The decision to scrap the third phase of the digital wallet program was influenced by opposition from key advisory bodies, including the National Economic and Social Development Council (NESDC) and the Bank of Thailand (BoT). Both agencies argued that the handout was ill-suited to address the looming crisis, advocating instead for structural reforms and liquidity support for affected industries. A source from Government House revealed that the redirection of 157 billion Thai Baht (US$4.4 billion) from the central emergency budget aims to deliver more immediate and impactful results.
Global Trade Tensions Fuel Policy Shift
Thailand’s economy, heavily reliant on exports, faces significant headwinds from the recent U.S. tariff hikes, which are part of a broader trade war affecting global markets. These measures have already begun to impact Thai exporters, supply chain businesses, and manufacturers, who are grappling with an influx of cheap foreign goods. The government’s new stimulus package will focus on production restructuring to help domestic industries adapt to these challenges, alongside financial support to maintain liquidity.
Prime Minister Paetongtarn Shinawatra emphasized the need for a holistic approach, noting that the crisis extends beyond Thailand’s borders. “This is a global economic crisis. We need to use both financial resources and policy tools to stimulate the entire economy, not just focus on one age group” said the Prime Minister. Her comments suggest a shift toward inclusive measures, potentially reviving elements of past programs like the “Let’s Go Halves” co-payment scheme, which encouraged consumer spending through government subsidies.
The Economic Stimulus Policy Committee, chaired by the Prime Minister, is set to convene on May 19 at Government House to finalize the new plan. The Finance Ministry will present proposals aimed at mitigating the impact of U.S. tariffs, with a particular focus on protecting small and medium-sized enterprises that form the backbone of Thailand’s manufacturing sector.
Public Reaction and Political Implications
The cancellation of the digital wallet program risks alienating segments of the population who had anticipated the cash handout as a financial lifeline. For many young Thais, the 10,000 Thai Baht (US$280) payment represented a tangible benefit amid rising living costs. While the government insists that the new stimulus measures will benefit a wider demographic, public disappointment could fuel criticism of its handling of the economy.
Prime Minister Paetongtarn acknowledged these concerns, stating that the government is determined to find the most effective solutions and will consider all perspectives before finalizing its strategy. However, the decision to prioritize business support over direct handouts may test the administration’s political capital, especially as economic uncertainty looms into the second half of 2025.
Analysts suggest that the government’s ability to communicate the rationale behind this pivot will be crucial. The involvement of respected institutions like the NESDC and BoT in shaping the new policy may lend credibility to the decision, but public trust will hinge on visible outcomes. If the stimulus package fails to deliver quick relief to struggling sectors, the administration could face growing discontent.
Economic Outlook and Sectoral Impacts
Thailand’s economic challenges are compounded by its position as a major exporter in a region vulnerable to global trade disruptions. The U.S. tariff measures, described as reciprocal by Thai officials, are expected to disrupt supply chains for electronics, automotive parts, and agricultural products—key pillars of the country’s export economy. Manufacturers, already under pressure from rising production costs, now face the added burden of competing with cheaper imports flooding the market.
The government’s focus on tourism and real estate as engines of growth reflects their historical resilience during economic downturns. Tourism, which accounts for a significant share of Thailand’s GDP, has been a priority for recovery efforts since the pandemic. New stimulus measures could include incentives for international visitors or infrastructure projects to boost domestic travel. Similarly, real estate initiatives may aim to stimulate construction and property markets, providing jobs and supporting related industries.
However, these sectors are not immune to global pressures. A prolonged trade war could dampen tourist arrivals from key markets like the U.S. and China, while real estate investments may slow if consumer confidence wanes. The government’s challenge lies in balancing short-term relief with long-term reforms to ensure sustainable growth.
Regional Context and Comparative Strategies
Thailand’s policy shift mirrors responses across Southeast Asia, where governments are recalibrating economic strategies in response to global trade tensions. Neighboring countries like Vietnam and Malaysia have also introduced targeted stimulus packages to protect export industries, with Vietnam focusing on technology manufacturing and Malaysia bolstering palm oil production. Thailand’s emphasis on tourism and real estate sets it apart, leveraging its unique strengths to offset losses in other areas.
Yet, the scale of Thailand’s redirected budget—157 billion Thai Baht (US$4.4 billion)—underscores the severity of the perceived threat. Unlike smaller stimulus efforts in the region, this package represents a significant reallocation of resources, reflecting both the urgency of the crisis and the government’s determination to act decisively. Whether this approach will yield better results than direct cash handouts remains to be seen, but it signals a willingness to adapt to rapidly changing circumstances.
Looking Ahead: Challenges and Opportunities
As Thailand navigates this turbulent economic landscape, the effectiveness of its new stimulus measures will be closely watched. The government faces a delicate balancing act: addressing immediate needs while laying the groundwork for long-term stability. With the Economic Stimulus Policy Committee set to finalize its plans on May 19, all eyes are on the specific policies that will emerge and their potential to shield vulnerable sectors from global shocks.
For now, questions linger about the broader implications of this policy shift. Will the redirected funds provide meaningful relief to exporters and manufacturers, or will they fall short in the face of entrenched global challenges? And how will the public, particularly young Thais who were counting on the digital wallet handout, respond to a government prioritizing structural reforms over direct aid? As Thailand braces for a challenging second half of 2025, the answers to these questions will shape both its economic trajectory and the political fortunes of its leaders.
