Thai Finance Minister says plans debt relief measures, seeks to ease mortgage rules
FILE PHOTO: Thailand's newly appointed Finance Minister and Deputy Prime Minister Pichai Chunhavajira looks on, on the day of the cabinet meeting at Thai Government House in Bangkok, Thailand, May 7, 2024. REUTERS/Chalinee Thirasupa/File Photo
BANGKOK : Thailand is planning measures to tackle household debt including a suspension of interest and reduced principal payments on some bad debts, the finance minister said on Friday.
Under the proposals, borrowers with debts that are overdue by between one and 12 months would receive a suspension of interest for three years and a 50 per cent reduction of principal payments, Pichai Chunhavajira told reporters.
The measures, which will be discussed with the Bankers' Association later on Friday, would also include extending the repayment period and allowing banks to consider granting new loans, he said.
"This group's debts can be resolved," he said, adding debts overdue longer than a year might be more difficult to tackle.
Pichai said commercial banks had agreed with the measures in earlier discussions, and added the ministry would consider helping with banks' expenses if the proposals were accepted.
"The proposals to solve the debts will help retail debtors restructure their debts and have more access to credit," Pichai said.
Thailand had a household-debt-to-GDP ratio of 89.6 per cent at the end of June, with household debt at 16.3 trillion baht ($482 billion), among the highest levels in Asia.
The high debt has restrained consumption, weighing on growth in Southeast Asia's second-largest economy, which has lagged its regional peers in recent years.
Pichai also said he would discuss an easing of loan-to-value rules with the central bank to support the property sector.
($1 = 33.84 baht)
