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More than half of Thailand’s household debt is good debt says Finance Ministry

The COVID-19 situation caused the economy to contract in 2020, raising the level of household debt against gross domestic product (GDP) to 86.6 percent in the third quarter of last year.

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BANGKOK (NNT) – Although Thailand’s household debt has increased due to the COVID-19 crisis, household debt in many countries has also risen.

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More than half of typical household debt is good debt, including home loans and business loans. The government and the Bank of Thailand (BOT) have continually taken measures to help debtors repay their creditors.

Adviser to the Fiscal Policy Office (FPO), Wuttipong Jittungsakul, said today the COVID-19 situation caused the economy to contract in 2020, raising the level of household debt against the gross domestic product (GDP) to 86.6 per cent in the third quarter of last year.

The figure was calculated using the country’s GDP growth rate in 2020, a negative 6.1 percent.

Other countries, such as Australia, Norway, Sweden, the Netherlands, Canada, South Korea and Malaysia, have also experienced similar circumstances. Their household debt to GDP ratio increased by between 87.5 percent and 128.1 percent.

More than half of Thailand’s household debt is good debt, as people acquired loans to improve their quality of life. Thirty-four per cent was in home loans, 30 per cent was for personal consumption, 18 per cent was in business loans and 13 per cent was in car and motorcycle loans.

Since the COVID-19 crisis, the government and the central bank have rolled out debt relief measures, such as extending repayment periods, suspending debt repayments, reducing interest rates, implementing debt restructuring and waiving interest payments. As a result, most debtors are able to repay their loans as usual, while the number of people asking for assistance has decreased. Once the economic situation improves, household debt is expected to decrease.

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Reporter : Praphorn Praphornkul
Rewriter : Tarin Angskul
National News Bureau & Public Relations :
http://thainews.prd.go.th

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Economics

The Future of Asia: greener but with a public and private debt hangover

The COVID-19 pandemic has been a perfect storm, destroying jobs, worsening poverty and inequality, and creating a public and private debt problem—especially for countries and firms already in fragile financial health beforehand

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Economics

50:50 campaign may not get immediate extension

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BANGKOK (NNT) – The government’s 50:50 co-pay campaign expiring on 31st March may not be getting an immediate campaign extension. The Minister of Finance says campaign evaluation is needed to improve future campaigns.

The Minister of Finance Arkhom Termpittayapaisith today announced the government may not be able to reach a conclusion on the extension of the 50:50 co-pay campaign in time for the current 31st March campaign end date, as evaluations are needed to better improve the campaign.

Originally introduced last year, the 50:50 campaign is a financial aid campaign for people impacted by the COVID-19 pandemic, in which the government subsidizes up to half the price of purchases at participating stores, with a daily cap on the subsidy amount of 150 baht, and a 3,500 baht per person subsidy limit over the entire campaign.

The campaign has already been extended once, with the current end date set for 31st March.

The Finance Minister said that payout campaigns for the general public are still valid in this period, allowing time for the 50:50 campaign to be assessed, and to address reports of fraud at some participating stores.

The Fiscal Police Office Director General and the Ministry of Finance Spokesperson Kulaya Tantitemit, said today that a bigger quota could be offered in Phase 3 of the 50:50 campaign beyond the 15 million people enrolled in the first two phases, while existing participants will need to confirm their identity if they want to participate in Phase 3, without the need to fill out the registration form.

Mrs Kulaya said the campaign will still be funded by emergency loan credit allocated for pandemic compensation, which still has about 200 billion baht available as of today.

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Customs Department Considers Measures to Help SMEs

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BANGKOK (NNT) – The Customs Department is seeking ways to reduce the impact of the exemption on import tax and value-added tax (VAT) for imported goods worth up to 1,500 baht, as such measures are hurting small and medium-sized enterprises (SMEs).

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