Cabinet Approves Debt Relief Measures

On Wednesday, Thailand's cabinet approved a series of debt support measures aimed at alleviating household debt, according to Prime Minister Paetongtarn Shinawatra. These measures include interest suspensions and reduced principal payments, designed to assist retail borrowers and smaller businesses.

Finance Minister Pichai Chunhavajira announced that the cabinet also agreed to allow banks to pay a reduced annual contribution of 0.23% of their deposits to the Financial Institutions Development Fund (FIDF) for three years. This reduction is intended to help banks support debtors more effectively.

Currently, banks are required to 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 Bank of Thailand will hold a briefing on these debt relief measures later today.

These measures will assist borrowers with debts that are up to a year overdue, covering housing loans of up to 5 million baht, car loans not exceeding 800,000 baht, and smaller firms' loans of up to 5 million baht. The government has been actively seeking ways to ease the debt burden on households, which it views as a significant constraint on consumption and economic growth.

Thailand's household debt-to-GDP ratio stood at 89.6% at the end of June, with total household debt amounting to 16.3 trillion baht, one of the highest levels in Asia.