BANGKOK- Thailand’s economy is in a state of recession owing to a high level of household debt, a deputy finance minister said on Monday, reiterating the need for stimulus to jumpstart the economy.
Deputy Finance Minister JulapunAmornvivat said the government was committed to delivering on its signature 500 billion baht ($14.05 billion) handout plan of transferring 10,000 baht to 50 million Thais, and hoped a delay in its rollout would not be long.
The government last week slashed 2024 growth projections for Southeast Asia’s second-largest economy to 2.8 percent from an earlier forecast of 3.2 percent on weaker exports and lower foreign tourist numbers.
It also lowered the 2023 growth estimate to 1.8 percent from 2.7 percent . That compared to growth in 2022 of 2.6 percent .
“If you ask, now it’s at the dangerous level. It’s a kind of economic recession,” Julapun told reporters.
“This is caused by a situation where the household debt burden is high. People’s debt burden is high, private sector debt burden is high.”
He added: “It’s difficult to drive the economy forward. That’s why we’ve seen economic growth that has always been sluggish.”
Julapun also said Thailand is planning to issue bonds overseas in the next one or two years in dollar, yuan and yen.
He said there would be a sale of government savings bonds worth about 100 billion baht ($2.81 billion) in the 2024 fiscal year, with the first batch in march.
Thailand’s exports rose for a fifth straight month in December but at a slower pace and less than analysts’ forecasts, and the commerce ministry said on Friday that it expected small export growth in 2024 after a slight drop last year.
Customs-based exports rose 4.7 percent in December from a year earlier, compared with a forecast for a 6.0 percent year-on-year increase in a Reuters poll, and following November’s 4.9 percent rise.
December exports, a key driver of Thailand’s economy, dropped 2.9 percent from the previous month.
“Geopolitical problems that affect global trade and pose risks to the global supply chain remain a significant factor that need monitoring as they could impact future exports,” the ministry said.
