Thai state banks urged to bolster export businesses amid US tariffs
Government push aims to ease pressure on trade flows and stabilise vulnerable logistics networks
State-owned financial institutions are encouraged to implement measures to aid export businesses and the supply chain.
During a policy briefing yesterday, May 15, Finance Minister Pichai Chunhavajira highlighted the impact of US reciprocal tariffs, predicting a two-year challenge for domestic businesses, particularly those involved in exports.
Pichai urged these financial institutions to expedite the introduction of support measures, especially for exporters dealing with the US market. He also requested assistance for Thai businesses facing competition from Chinese imports. Additionally, state banks have been called upon to support the real estate sector, particularly post-financing loans, as well as for tourism operators, focusing on small and medium-sized enterprises (SMEs).
Pichai expressed confidence that the effects of the reciprocal tariffs would not disadvantage Thailand more than other countries, suggesting that effective management could yield long-term benefits.
Addressing household debt, Pichai noted a decrease in its proportion to GDP, now at 86% compared to 91% at the start of the year, due to GDP growth despite the total debt amount remaining unchanged. He suggested that stimulating economic growth could be a viable strategy to address household debt.
Non-performing loans (NPLs) for household debt amount to 122 billion baht, affecting 5.4 million debtors, with 3 million owing less than 100,000 baht. State-owned banks account for only 10% of total household NPLs.
The Government Savings Bank (GSB) has resolved NPLs for 500,000 accounts with amounts below 100,000 baht and aims to resolve another 400,000 accounts within three months. The Bank for Agriculture and Agricultural Cooperatives has resolved 200,000 accounts, with plans to resolve an additional 70,000.
Pichai noted that financial institutions have historically hesitated to provide loans due to a lack of confidence, yet state-owned banks are now positioned to expand loan provision. GSB plans to offer a 100-billion-baht soft loan to other financial institutions at a 0.01% interest rate to support exporters affected by US tariffs. The Export-Import Bank of Thailand (EXIM Bank) intends to reduce interest rates for exporters by 20% from current levels, shouldering the cost itself unless it becomes unsustainable, in which case the Finance Ministry might seek Cabinet approval for a subsidy, reported Bangkok Post.
These measures are slated for proposal to the economic stimulus committee, which is set to convene next Monday, May 19.
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