Thailand's cabinet approved a plan to increase next year's budget deficit by 152.7 billion baht ($4.17 billion), a senior official said on Tuesday, a move aimed at stimulating an economy lagging its peers in the region.

The revision would bring next year's budget to 3.752 trillion baht ($102.40 billion), up from 3.6 trillion previously planned, Chalermphol Pensoot, director of the budget bureau told reporters.

The announcement comes as the government seeks funding sources for its signature 500 billion baht ($13.64 billion) "digital wallet" scheme, a one-time giveaway of 10,000 baht ($272.85) to 50 million Thais to be spent in their communities.

Prime Minister Srettha Thavisin has said Southeast Asia's second-largest economy needed major stimulus and the handout plan could get it out of a "crisis".

Last month, the government said it would adjust the 2025 budget to accommodate the digital wallet, a key campaign promise of the ruling Pheu Thai party. It has been delayed to the fourth quarter this year due to funding issues.

Chalermphol said the budget would be used to stimulate the economy but did not specify if it would be used to fund the digital wallet programme.

Some experts have called it policy fiscally irresponsible and that fixing Thailand's economy requires addressing structural problems.

($1 = 36.6500 baht) (Reporting by Kitiphong Thaichareon, Satawasin Staporncharnchai, writing by Chayut Setboonsarng; Editing by Martin Petty)