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Thai Prime Minister pledges to address the issue of household debt
Thailand’s household debt reached 16.07 trillion baht by the end of the second quarter of this year, indicating a 3.6% increase compared to the same period last year, according to the National Economic and Social Development Council (NESDC).
Key Takeaways
- Thai Prime Minister Srettha Thavisin has announced a national initiative to address the problem of non-formal debts.
- The Thai government has launched a comprehensive initiative to address non-formal debts as a national priority, aiming to release citizens from the burden of “debt slavery.”
- To tackle rising household debt, special loans will be provided by the Finance Ministry, Government Savings Bank, and the Bank for Agriculture and Agricultural Cooperatives, with the government acting as a mediator between debtors and creditors.
- The initiative aims to adjust debt structures, offer post-process measures, and provide opportunities for citizens to liberate them from the cycle of debt.
“Informal debt can be likened to modern-day slavery, as it has the power to destroy dreams and is a persistent issue,” he expressed during a press conference. Furthermore, he mentioned that the government is committed to working closely with the police in order to effectively tackle the issue of unregulated lending, commonly referred to as “loan sharks”.
The National Economic and Social Development Council (NESDC) recently reported that Thailand is facing a significant challenge in the form of high household debt, which currently stands at 90.6% of the country’s gross domestic product (GDP). It is worth noting that this percentage has remained constant since the beginning of the year.
The government, along with key ministries and state banks, will provide special loans and act as a mediator between debtors and creditors.
The Finance Ministry will offer loans of up to 50,000 baht for up to five years, while the Bank for Agriculture and Agricultural Cooperatives will provide agricultural loans. The initiative is seen as a crucial step towards alleviating the burden of debt and fostering economic recovery.
High household debt and inflation have dampened domestic consumption demand and short-term measures to boost demand were defended. The implementation of a 10,000-baht digital wallet handout is planned for May next year.
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