gths to keep one, even when it appears that the need for implementation of the promise has passed or was arguably never there in the first place. In the case of the Thai government’s digital currency handout proposal, which was originally supposed to happen sometime in the first quarter of this year, many economists, government legal advisors and retailers are either hard-pressed to find a compelling reason for it or concerned that the means of financing it will break the budget and maybe even the law. Haggling over the proposal set the launch date back to May, but the Deputy Finance Minister has now reportedly conceded that even a May start date isn’t feasible. The government is, however, insisting that it will happen…eventually. What was the plan anyway? The government’s proposal is for all Thais over the age of 16 to receive 10,000 Thai baht (US$280). It could only be spent on a limited range of necessities, including food, and it had a time limit of six months. Oh, and it had to be spent within a four-kilometer radius of the recipient’s home. The handout would come as a blockchain-powered digital wallet delivered to the beneficiary’s smartphone, or, if the recipient didn’t have a smartphone, (s)he could still participate by registering with his national identification number and receiving a code. Retailers ‘inside’ the tax system could exchange their income for Thai currency, while retailers that were ‘outside’ the tax system could still use the digital money received from consumers to buy inventory from suppliers ‘inside’ the system.  In total, the program would cost about 560 billion Thai baht, or US$16 billion. To put that in perspective, it is approximately 15 per cent more than the total annual revenue of CP Axtra, Thailand’s largest retail/wholesale conglomerate. Objections have mounted A number of objections were raised from the get-go. Surely the proposal should be better targeted: why should the rich get a handout along with the poor? Why is there a four-kilometer restriction when millions of rural Thais don’t have nearby access to high-quality (or even medium-quality) retail facilities?  It was the first of these that got the attention of economists, who objected to sending out money willy-nilly without any kind of means test. They thought it would be inflationary to boot, as did the nerds at the country’s central bank, the Bank of Thailand.  Then there was the thorny question of funding. The government wants to borrow 500 billion baht but its legal office, the Council of State, has prevaricated as it could put the government in hot water in relation to both Thai law and the Constitution itself. Specifically, it could violate the 2018 State Fiscal and Financial Discipline Act, which stipulates the government can only take out off-budget loans (as it did for Covid in 2020) in urgent situations. The Council doesn’t regard the current condition of the Thai economy as an ‘urgent’ situation. Indeed, the economy grew by an estimated 2.5 per cent in 2023, sluggish by historical standards but hardly requiring the kind of kick up the backside a mammoth loan would imply. Typically, stimulus programs need to be up and running and the ‘check in the mail’ very quickly. This is part of the beef that the Council of State has with the program: if it really was an emergency, why wouldn’t the government just do it with a decree (quick) as opposed to legislation (cumbersome)? The other, constitutional, problem surrounding the loan is that the government would be required to offset the amount in the following year’s budget, which the Council of State says it would be impossible to do. The National Anti-Corruption Commission (NACC), which also reviewed the proposal, is similarly unimpressed with the need for such a massive handout. The proposal has put the Prime Minister, who is also the Finance Minister, at loggerheads with the brass at the Bank of Thailand, which, despite negative inflation in Thailand (the CPI was -0.83 per cent in December) has been busy hoiking up interest rates, with the official rate now at 2.50 per cent. The government is upset that the Bank is raising rates in a deflationary environment, and it has a good point, although savers who have suffered through a long period of negative real returns on their deposits are happier with the positive nominal rates. It has also helped the Thai baht, which has been one of the weaker currencies in ASEAN in recent times. On the downside, it raises the cost of debt that households took on when interest rates were lower, elevating the risk of stress on household balance sheets. How are the retailers doing, really? Thai consumers, of course, wouldn’t say no to a handout, even though Thailand’s consumer confidence index for November 2023 (latest data available), stood at the highest level since February 2020. This is largely attributable to the returning tourism footfall and government measures to put a lid on energy prices. Retail sales were up 17.1 per cent in October year-on-year, with the tourist high season beginning and international arrivals up 50 per cent over October 2022. The arrivals growth trend has continued through the end of 2023 so the national retail data yet for November and December, when it becomes available, should reflect robust gains. Burrowing into the Bank’s retail sales sub-indexes reveals that the tourism boom is having a highly beneficial effect in categories like sales in stalls and markets, and cultural and recreational goods, but has been of very little assistance to mainstream stores in ‘modern’ retail settings such as shopping centers and department stores. Central Retail, one of Thailand’s largest retail conglomerates, which operates a plethora of retail brands over a wide range of soft goods, hard goods and food, reported that its sales in Thailand grew by 6 per cent year-on-year in the third quarter (the latest information available at the time of writing) with particularly strong growth in fashion and that its overall results were held back not by its operations in Thailand but rather by its results in Vietnam. Big C, another major retailer with a presence all over Thailand, experienced sales growth of 5.8 per cent in the third quarter compared to a year ago, although this came with the help of 70 new stores over the course of the year. Comparable-store sales were less impressive, up 2.1 per cent year-over-year against a base number of -0.5 per cent after averaging 5.6 per cent growth over the preceding nine months.  CP Axtra, the operator of Makro and Lotus’s, saw good growth in sales that was not driven only by the addition of new stores: same-store sales for Makro (which sells to both wholesale and retail customers) grew by 3.2 per cent and for Lotus’s (retail customers) by 2.2 per cent. Central Pattana, which has 56 shopping malls around the country, reported an 18 per cent increase year over year in mall rental income and a 22 per cent jump for the first nine months, some of which is tied to tenant sales. These numbers suggest a retail industry that is still buoyant, and not in and of itself needing a government subsidy. Poor Thais will be more enthusiastic. As far as the government is concerned, it’s for the poorer folk that their election promise is worth the fight.