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BANGKOK (Reuters) – Thailand’s economy is in recession due to high levels of household debt, the deputy finance minister said on Monday, reiterating the need for stimulus to revitalize the economy.
Deputy Finance Minister Jhurapun Amolunvivat said the government was committed to implementing its signature 500 billion baht ($14.05 billion) benefit plan, which would send 10,000 baht to 50 million Thais. He said he hoped the rollout would not be delayed for long.
Last week, the government lowered its 2024 growth forecast for Southeast Asia’s second-largest economy to 2.8% from the previous forecast of 3.2%, citing sluggish exports and a decline in the number of foreign tourists.
It also lowered its growth rate forecast for 2023 from 2.7% to 1.8%. In comparison, the growth rate in 2022 was 2.6%.
“If you ask me, we’re at a dangerous level right now. It’s a kind of economic depression,” Jurapin told reporters.
“This is due to the high debt burden on households. Both the public’s debt burden and the private sector’s debt burden are high.”
“It’s difficult to move the economy forward, which is why economic growth has always been weak,” he added.
Mr Jurapan also said Thailand plans to issue overseas bonds in the dollar, renminbi and yen within the next one to two years.
He said there would be sales of about 100 billion baht ($2.81 billion) worth of government savings bonds in the 2024 fiscal year, with the first installment starting in March. (1 dollar = 35.59 baht)
(Reporting by Orathai Sriring, Kitiphong Thaichareon, Satawasin Staporncharnchai; Writing by Martin Petty)
Copyright 2024 Thomson Reuters.
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