The supplementary budget, welfare smart card scheme and minimum wage hike are expected to help jump-start the purchasing power of low-income earners this year, says a senior official at the Fiscal Policy Office (FPO).
Private consumption is forecast to grow by 3% this year, a level considered on a par with the country's economic growth pace, said Soraphol Tulayasathien, director of the bureau of macroeconomic policy under the FPO.
The Finance Ministry's think tank estimates that the 100-billion-baht supplementary budget, to be allocated to the welfare and subsidy scheme for the poor, farm sector reform and Village Funds, will add 0.1 percentage point to the country's GDP.
The daily minimum wage hike of 5-22 baht nationwide, effective April 1, and the additional living allowance of 100-200 baht a month to be given to welfare and subsidy recipients who sign up for training programmes, will boost purchasing power for low-income earners, Mr Soraphol said.
The government will spend 3.2-3.3 billion baht a month for the additional living allowance.
Starting next month, the government will offer each recipient a monthly allowance of 100-200 baht to buy goods at Thong Fah Pracha Rat shops, on top of the 200-300 baht given under the first phase for those who volunteer for the training programmes.
Addressing poverty and injecting funds into the rural economy are government priorities in efforts to broaden the economic recovery, as low-income earners have not reaped benefits from the recovery.
Durable goods sales grew by 2.2% in the three months to December last year, while passenger car sales surged 33%, Mr Soraphol said.
The jump in car sales could be attributed to a lapse of the five-year ownership transfer lockup period for those who had bought cars under the tax refund scheme for first-time car buyers, allowing them to sell their vehicles and buy new ones.
Rising rice prices will be another driver in improving purchasing power for low-income earners going forward, Mr Soraphol said.
He said value-added tax (VAT) receipts rose by 5.9% year-on-year in December, and VAT on domestic purchases of products and services jumped 6.8% year-on-year, suggesting recovering purchasing power.
