By Reuters and published by CNA
THE Bhumjaithai-led coalition government will spend 10 billion baht ($307 million) to buy bad debt this month, the Finance Minister said today (Oct. 9), as part of its plans to revive its sluggish economy.
Thailand’s stubbornly high levels of household debt have shackled the economy for several years, with the ratio of household debt to gross domestic product standing at 86.8 percent by the end of June, among the highest levels in Asia. The total amount of debt stood at 16.3 trillion baht ($501 billion).
No fiscal burden from debt plan
“The project to buy bad debt will be funded by the 26 billion baht remaining from the previous rehabilitation funds and contribution deductions, without using any fiscal budget,” Finance Minister Ekniti Nitithanprapas told reporters.
The announcement sent the Thai benchmark index up nearly 1 percent, the highest jump since Feb 4.
Fiscal discipline and tech-driven investments
Fiscal discipline will be enhanced to boost confidence and there will also be support for new investments in technology, he said.
Thailand attracted 90.9 billion baht of investments in cloud services and data centres from the likes of Microsoft and ByteDance’s TikTok in the first quarter this year, according to the country’s investment board, with TikTok pledging to invest 126.8 billion baht for a data hosting service.
Government counting on debt relief and subsidies
Tackling the debt, alongside a $1.4 billion “co-payment” subsidy scheme to boost consumption, is part of the government’s plan to jump-start the economy, which could see fourth quarter growth slip to 0.3 percent if problems remain unaddressed.
Slowing exports, falling tourist numbers and a strong baht have also weighed on Southeast Asia’s second-largest economy.
Targeting stronger economy by yearend
Ekniti said all the stimulus measures would help the economy grow at least 1 percent in the final quarter of 2025 as the government aims for full-year growth above 2.2 percent.
That compares with last year’s 2.5 percent growth, which had lagged regional peers.
The finance minister’s comments came a day after the central bank unexpectedly held rates steady at 1.50 percent following the appointment of a new governor.
($1 = 32.57 baht)
CAPTION:
Deputy Prime Minister/Finance Minister Ekniti Nitithanprapas. Photo above – Naewna, Front Page – Reuters/Chalinee Thirasupa and published by CNA
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