Thai political parties promise $92 billion per year to voters

With Thailand going into a general election in May, key political parties are promising the nation s more than 50 million voters almost everything from steep increases in cash handouts and wages to suspending debt repayment.

After excluding their overlapping policies, pledges from the top nine parties will require about 3.14 trillion baht $92 billion per year, according to an analysis by the Thailand Development Research Institute. A litany of promises by two parties will require 2 trillion baht per year to be implemented, the institute said.

Now that Prime Minister Prayuth Chan-Ocha has ordered the dissolution of Parliament, campaigning will be more turbocharged than ever, leading to a vote the Election Commission has penciled in for May 7, although the final date has yet to be confirmed.

Some analysts believe that the Thai public finances and fragile economic recovery have been hampered by the lack of funding sources because of the assurances of largesses without spelling out funding sources. Southeast Asia's second-largest economy borrowed 1.5 trillion baht during Covid to finance various measures and lifted the debt ceiling to 70% of gross domestic product to create room for larger funding.

A large part of Thai society, especially the daily-wage earners, farmers, and small and medium enterprises, still reeling from the effects of the pandemic, Pheu Thai has pledged to double minimum wages by 2027, according to Pheu Thai, the party leading in pre-election surveys. While supporters cheered the proposal, opponents and some economists disapproved, saying that would destroy businesses and fuel inflation.

Prayuth s United Thai Nation Party plans to spend more than triple cash handouts to around 15 million welfare cardholders to 1,000 baht a month, more than the 700 baht promised by the ruling Palang Pracharath party.

This is despite Thailand's laws banning parties from promising voters with pledges that aren't economically viable by requiring them to spell out how much the policies will cost and sources for funding.

According to Napon Jatusripitak, a research fellow at Singapore-based ISEAS-Yusof Ishak Institute, there is very little policy differentiation among most parties in terms of economic ideology, as they align in the sense that the state will play a big role in supporting the economy. It really comes down to who is offering more money. The fiscal deficit may not be widened until Thailand's revenue this year is overshooting the goal, as the freebies may not be immediately widening it. The nation trims the budget gap in the year ending Sept. 30 to 3.2% of GDP from 6.1% a year ago, and with government formation likely to take months after the vote, state spending may fall sharply, according to Nomura Holdings Inc.

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