Thailand's cabinet approved debt support measures, including interest suspensions and reduced principal payments, to help tackle household debt, Prime Minister Paetongtarn Shinawatra said.
The measures will support retail borrowers and smaller businesses and solve debt problems in a more tangible and sustainable way, she told. The government has been trying to ease Thailand's household debt burden, which it sees as a constraint on consumption and economic growth. Thailand had an 89.6% household debt-to-GDP ratio at the end of June, amounting to 16.3 trillion baht ($482 billion), among the highest levels in Asia.
Finance Minister Pichai Chunhavajira told that cabinet also agreed to let banks pay a reduced annual contribution of 0.23% of their deposits to the Financial Institutions Development Fund (FIDF) for three years. The reduced FIDF contributions would help banks support debtors, officials have said.
Banks currently must pay an annual regular contribution rate of 0.46% of their deposits to the FIDF, the central bank's rescue arm that provides financial assistance to troubled institutions. The measures will help borrowers with debts that are up to a year overdue, covering housing loans of up to 5 million baht ($148,060), car loans not over 800,000 baht and smaller firms' loans of up to 5 million baht, the government said.
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