Prime Minister Abhisit Vejjajiva said the money will be allocated to help the poor deal with the economic downturn and to rejuvenate a tourism industry battered by months of political unrest. Anti-government protests culminated with a weeklong seizure of Bangkok's airports in November, stranding more than 300,000 travelers.

"The measures are based on the idea of reviving the economy directly, that is, adding money in people's pockets," Abhisit told reporters after a weekly Cabinet meeting. "Giving money directly to people is the most effective way. It will lead to more spending that will help industrial, agricultural and business sectors."

The stimulus package was approved in principle and will be officially approved by the Cabinet next week, Abhisit said. The measures will then be submitted to Parliament on Jan. 28.

The funds will be used to support social security, free education programs, create jobs and provide low-interest loans to farmers.

The government will also extend a package of economic stimulus measures implemented by the previous government by another six months. These include lower water and electricity charges, free rides on some of Bangkok's public buses and free third-class train rides nationwide.

A portion of the funds will be doled out in a one-off allowance of 2,000 baht ($57) to several millions of low-income employees and government officials, said Labor Minister Phaithoon Kaeothong. Only those who earn less than 14,000 baht ($400) a month will qualify.

Abhisit had earlier said his government would retain populist policies — including cheap credit and health care — implemented under exiled former Prime Minister Thaksin Shinawatra, who has loomed over Thai politics even after being ousted by a military coup in 2006.

Abhisit, 44, was voted to be the new prime minister last month after a court dissolved the party leading the previous government.

A Cabinet statement said the stimulus package will also be used to help promote the country's battered tourism industry.

The Bank of Thailand has estimated the country would lose 290 billion baht ($8.3 billion) as a result of the weeklong blockade of Bangkok's two main airports by protesters who called for the ouster of the previous government packed with Thaksin's allies. It said the shutdown of the airports would deter 3.4 million tourists from visiting the country.

Southeast Asia's second-largest economy is likely to grow between 0.5 percent and 2.5 percent in 2009 — a sharp slowdown from last year — because of declining exports and weak domestic demand, the central bank said earlier this month.

The central bank is expected to cut its benchmark interest rate on Wednesday.