Thailand Cabinet Approves Relief Measures for Tackling Debt

In order to combat household debt, Thailand's cabinet approved debt support measures, including as lower principal payments and interest suspensions, according to Prime Minister Paetongtarn Shinawatra. The cabinet also decided to permit banks to make a three-year, reduced annual contribution of 0.23 percent of their deposits to the Financial Institutions Development Fund (FIDF), according to Finance Minister Pichai Chunhavajira.

Officials have stated that banks would be able to assist debtors with the lower FIDF contributions.

The FIDF, the central bank's rescue arm that offers financial support to struggling institutions, presently requires banks to make an annual regular contribution rate of 0.46 percent of their deposits. A briefing on the debt relief measures will be held later by the Bank of Thailand.

In a statement, the government said the measures would assist borrowers with debts up to a year overdue, including house loans up to 5 million baht (US$148,060), auto loans up to 800,000 baht, and loans for smaller businesses up to 5 million baht.

The government has been working to reduce family debt because it believes it is a barrier to economic growth and consumption.

At the end of June, Thailand's household debt was 16.3 trillion baht (US$482 billion), one of the highest in Asia, and its household debt-to-GDP ratio was 89.6%.