Thailand’s leading business groups, including the Thai Chamber of Commerce, the Federation of Thai Industries, and the Thai Bankers Association, have urged Prime Minister Paetongtarn Shinawatra to implement a new wave of measures to boost consumer spending and tackle the country’s high household debt burden, Bloomberg reports.
In a joint statement following a meeting with the Prime Minister and key economic ministers on Monday, the groups presented a package of suggestions. They advocate for the reintroduction of pandemic-era measures such as a co-payment scheme for consumer goods and tax incentives to encourage spending. The business leaders believe these initiatives could propel economic growth to a rate of 4-5% in 2025.
Thailand’s economy has been lagging behind its regional counterparts, expanding at an average of less than 2% over the past decade. The surge in household debt and the impact of cheap imports from China on the manufacturing sector have hampered growth.
Paetongtarn’s government has already taken steps to address the situation, including passing a larger budget and providing approximately $4 billion in cash assistance to vulnerable groups to alleviate the cost of living.
Finance Minister Pichai Chunhavajira indicated that the government will carefully consider the timing and appropriate measures to further stimulate the economy. He forecasts a GDP growth rate of 2.7%-2.8% for this year.
Further action is expected in the coming weeks. Payong Srivanich, president of the Thai Bankers Association, revealed that the government plans to announce debt relief measures for certain groups of borrowers. These measures may benefit borrowers of first home buyers, pickup trucks, and small businesses, targeting individuals and businesses facing financial hardship.
The government has pledged to tackle the massive pile of household debt, exceeding $500 billion and representing nearly 90% of GDP. This debt ratio, nearly double the average for emerging market economies, has raised concerns, exceeding the 80% threshold deemed concerning by the Bank for International Settlements.
The debt relief package is expected to include measures like reduced interest and principal payments for vulnerable borrowers, government financial assistance, and soft loans.
