Thai government unveils ambitious 500 billion Baht plan for debt resolution

A plan to resolve Thailand’s mounting debt issues, developed by the Thai government, is projected to rejuvenate the country’s economy by an impressive 500 billion baht (US$14 billion) if successful, according to 45 year old government spokesperson Chai. The initiative, designed to address debt problems within the agricultural, business, and civil society sectors, aims to provide relief to approximately 5 million individuals, enabling them to bounce back and contribute productively to society.

Debt challenges, encompassing both formal and informal loans, have long overshadowed Thai society, Chai added. To tackle these persistent issues, the government has formulated strategies with the incorporation of all relevant agencies to provide sustainable solutions.

On December 12, Prime Minister Srettha Thavisin aided his government’s ambitious plan to alleviate universal household debts. The scheme includes a debt moratorium for roughly 1.1 million debtors impacted by the Covid-19 pandemic, many of whom borrowed from the Government Savings Bank and the Bank for Agriculture and Agricultural Cooperatives.

The government also aims to modify a debt restructuring plan for small and medium-sized enterprises (SMEs) that owe money to state-run banks. They will receive a debt moratorium for one year, Srettha explained.

Furthermore, civil servants, such as teachers, police officers, and soldiers, will benefit from the government’s guidelines, which propose the reduction of loan interest and the consolidation of all debts to a single bank to facilitate easier debt payment. Salary adjustments for debt repayment will also be implemented.

Individuals with irregular incomes will be entitled to a temporary debt moratorium, loan interest reductions, or a decreased rate of monthly debt payments. Farmers, who are already beneficiaries of the government’s three-year debt moratorium, aiding over 1.5 million farmers, will also be considered under this initiative.

For those who have significant bad debts with state-run banks, they will be transferred to asset management companies. These are joint ventures of financial institutions and state agencies, which will aid in resolving issues through a debt restructuring plan, Srettha clarified.

Chai further assured that the government will take stringent measures to ensure all debtors receive proper loan interest and improve their debt management efficiency. Reported by the Bangkok Post, the government’s plan to tackle the nation’s debt issues underscores its commitment to reviving the economy and providing relief to debtors across various sectors.