Thai business groups press for more stimulus as economy sputters
The government says it will consider appropriate timing and measures to boost the economy
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 (Oct 28) to resolve the problems plaguing South-east 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 per cent in 2025, the groups said in a joint statement after the meeting.
Thailand’s economy has lagged the pace of expansion of its neighbours – growing at an average of less than 2 per cent 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 US$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 per cent-2.8 per cent.
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.
Paetorngtarn has pledged to restructure the massive pile of more than US$500 billion of household debt since taking office last month. The debt ratio of 90 per cent of gross domestic product is around double the average of emerging market economies and above the 80 per cent 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. BLOOMBERG
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