(Bloomberg) -- Thailand’s leading business groups and commercial banks urged Prime Minister Paetongtarn Shinawatra to roll out fresh measures to spur consumer spending and tackle one of the highest levels of household debt levels in Asia.
Top executives of the Thai Chamber of Commerce, the Federation of Thai Industries and the Thai Bankers Association submitted a raft of suggestions to Paetongtarn and her key economic ministers on Monday to resolve the problems plaguing Southeast Asia’s second-largest economy.
The private sector wants the government to re-introduce pandemic-era measures such as a co-payment scheme for consumer goods, and tax incentives to stimulate spending by early next year. Such initiatives can help drive economic growth rate to 4-5% in 2025, the groups said in a joint statement after the meeting.
Thailand’s economy has lagged the pace of expansion of its neighbors — growing at an average of less than 2% in the past decade — hobbled by the surge in household debt and a manufacturing sector hurting from cheap imports from China. Paetongtarn’s administration has already passed a bigger budget and handed out about $4 billion in cash to the so-called vulnerable group to ease the cost of living.
Finance Minister Pichai Chunhavajira said the government will consider appropriate timing and measures to boost the economy. He expects GDP growth this year at 2.7%-2.8%.
The government plans to announce debt-relief measures for certain groups of borrowers within the next two weeks, according to Payong Srivanich, president of the bankers association. The steps may benefit borrowers of first home buyers, pickup trucks and small businesses, he said.
A $500 Billion Pile of Household Debt Weighs on New Thai Leader
Paetorngtarn has pledged to restructure the massive pile of more than $500 billion of household debt since taking office last month. The debt ratio of 90% of gross domestic product is around double the average of emerging market economies and above the 80% level the Bank for International Settlements considers worrying.
Payong said the debt-relief package will include reducing interest and principal payments for borrowers in the vulnerable groups, fresh financial assistance from the government as well as some soft loans.
©2024 Bloomberg L.P.