Thailand’s state welfare card program has failed to reduce poverty, the Finance Ministry said this week, citing the economic downturn caused by the Covid-19 pandemic and rising unemployment.
The Fiscal Policy Office noted that increasing registrations for the welfare card show that the program is not working.
Kulaya Tantitemit, the Director-General at the Fiscal Policy Office said that the government wanted to see fewer people applying for the new round after receiving financial aid.
The new round of state welfare card registration will open “soon.”
However, “since the Covid-19 crisis has devastated the economy for almost two year, the result may not be as expected,” she said.
Welfare cardholders are entitled to monthly subsidies to support living costs, including the previous cash-handouts program to cope with the pandemic.
There are currently 13.65 million welfare cardholders whose annual income and financial assets is less than 100,000 baht per person.
According to the ministry, the next round’s eligibility criteria will put family income on the list for consideration and registration will open “soon.”
“Fragile” household debt situation
TMB-Thanachart Bank’s said that Thailand’s household debt was ranked 17th in the world, and predicated that the country would reach 93 per-cent dept to GDP ratio by the end of 2021.
Thai household debt amounts to 90.5 per cent of GDP currently, with households owing some 14 trillion baht to creditors.
“As Covid-19 restrictions stay in place, Thai households are creating more debt following a lack of liquidity from reduced income,” according TMB.
In addition to debt-relief measures from the banking industry, analysts encouraged the government to tackle the problem of informal debt and prepare for an economic recession in the coming years in order to aid debtors in the long run.
The Bank of Thailand’s governor Sethaput Suthiwartnarueput said in a seminar that the nation’s financial system is solid, and there are no big concerns for the weakening of baht.
According to Sethaput, the only worry was the issue of loan availability for small and medium-sized enterprises. The central bank is working on increasing access to cover all affected individuals.
“Stability, currency, or finance should not be a big issue,” he said.