Thailand’s cabinet has given the green light to a set of measures aimed at managing household debt, according to Prime Minister Paetongtarn Shinawatra. These include a pause on interest payments and decreases in principal payments in order to alleviate the burden on retail borrowers and SMEs.
Finance Minister Pichai Chunhavajira stated that the cabinet has agreed on a three-year reduction in the annual fee banks are obligated to contribute to the Financial Institutions Development Fund (FIDF), cutting it from 0.46% of their deposits to 0.23%. This step is designed to further support debtors.
Debt relief measures, to be elaborated on in a later briefing by the Bank of Thailand, will assist borrowers with up to a year’s overdue debt. Loans covered under this plan include housing loans not exceeding 5 million baht ($148,060), car loans not exceeding 800,000 baht, and SME loans up to 5 million baht.
With household debt at the end of June standing at 89.6% of the GDP, amounting to a substantial 16.3 trillion baht ($482 billion), the government views these measures as vital for household consumption and economic growth.
