Lenders to speed debt restructuring
Move will mean state won’t have to introduce new measures
Commercial banks and specialised financial institutions are being urged to accelerate implementing debt restructuring programmes for their clients to help curb rising unemployment.
Deputy Prime Minister Supattanapong Punmeechaow said the banks’ accelerated debt restructuring should help improve the liquidity of their debtors and prevent rising unemployment.
With this effort, the government has no need to introduce additional measures, he said.
“I talked with the Federation of Thai Industries and the Thai Chamber of Commerce to pressure commercial banks to approve their credit facilities more quickly, especially for small and medium-sized enterprises (SMEs) that are reeling from the credit crunch,” Mr Supattanapong said.
However, the government still plans to introduce additional measures in the last quarter, aiming to assist low-income earners and stimulate consumer spending.
He said the new stimulus measures may include a fresh phase of the TasteShop-Spend scheme, which involves cash giveaways and cash rebates or tax incentives to stimulate spending.
“It is possible that fresh additional measures will be vetted by the Center for Economic Situation Administration next week,” he said.
In a related development, Mr Supattanapong predicted that the economy is likely to get back to normal in two years.
“In the past three months, the government has used about 800 billion baht in supporting the economy, 400 billion of which was allocated to help 33 million low-income earners and farmers,” he said. “I think the economy should return to normal levels within two years, and if we can manage it very well, the recovery is possibly visible late next year.”
Danucha Pichayanan, deputy secretary-general of the National Economic and Social Development Council, said the think tank and the central bank are looking for ways to relax the 500-billion-baht soft loan conditions for better access to SMEs.
The central bank has been offering 500 billion baht in soft loans at 0.01% interest to financial institutions for two years to extend to SMEs with a maximum credit line of 500 million baht at 2% interest. The government will absorb interest charges for six months for SMEs that receive soft loans.
To be eligible, SMEs must operate domestically, be non-listed companies, have a credit line of up to 500 million baht from financial institutions, and continue to service debt or make late payments within 90 days at the end of last year.
In a bid to cope with the impact of the outbreak, the government in April launched a 1.9-trillion-baht package, marking the biggest relief measure ever, to soften the economic blow. The package includes a 1-trillion-baht borrowing plan.
Mr Danucha said borrowing lifted the ratio of public debt to GDP to 47% in July, up from 41% in early 2020, with the ratio likely to rise to 57% next year.
People queue at a Social Security Office for compensation for unemployment caused by the Covid-19 outbreak.