BANGKOK : Thailand’s household debt and non-performing loans have stabilised after economic growth gained pace towards the end of last year, its finance minister said on Friday, pledging more measures to help boost credit access.
Thailand’s had a household debt-to-GDP ratio of 89.6 per cent at the end of June last year, amounting to 16.3 trillion baht ($482 billion), among the highest levels in Asia. The government sees household debt as significant constraint on consumption and growth.
“Even though household debt has not decreased immediately, it has begun to stabilise,” Finance Minister Pichai Chunhavajira told reporters, adding the ministry will on Tuesday discuss with banks ways to ease credit for borrowers.
He said non-performing loans on a quarterly basis were not increasing, citing third and fourth quarter economic growth last year that exceeded 3 per cent.
Thailand’s government has a growth target of 3 per cent this year and hopes to surpass that through stimulus measures worth $4.4 billion and other moves to boost activity. The economy grew 2.5 per cent last year, far adrift of peers.
It is also looking to extend a reduction in property transfer fees and is a relaxing of loan-to-value rules for home loans.
In speech earlier this week, a transcript of which was released on Friday, central bank Governor Sethaput Suthiwartnarueput said Thailand need long-term solutions “not just short-term economic boosts”.
“We share the sentiment that a 2.5 per cent growth rate isn’t satisfactory,” he said.
The central bank made a surprise cut to the benchmark rate last month from 2.25 per cent to 2.0 per cent. The central bank’s next rate review is on April 30.
“We believe 2 per cent is a good, robust rate suitable for a wide range of outcomes, and we don’t plan to move rates frequently,” he said, adding that the central bank forecasts growth this year slightly above 2.5 per cent, on consumption, exports and tourism.
Exports, a key driver of the Southeast Asia’s second-largest economy, are expected to grow at a slower rate than last year’s 5.8 per cent, he said.
Inflation was expected to be 1.1 per cent this year, the governor said, adding that inflation being at the lower end of the central bank’s target range of 1 per cent to 3 per cent was not a concern.
