Thailand’s Economy in Recession Due to High Household Debt, Says Deputy Finance Minister
Thailand’s economy is facing a recession due to the alarming levels of household debt, according to Deputy Finance Minister Julapun Amornvivat. He emphasized the urgent need for stimulus measures to revive the economy, as the government remains committed to its 500 billion baht ($14.05 billion) handout plan. Julapun expressed hope that any delay in its implementation would be brief.
Government Reduces Growth Projections for Thailand’s Economy
In response to weaker exports and a decline in foreign tourist numbers, the Thai government has lowered its growth projections for the country’s economy. The revised forecast for 2024 now stands at 2.8%, down from the earlier estimate of 3.2%. Similarly, the growth estimate for 2023 has been reduced to 1.8% from 2.7%. These figures highlight a significant slowdown compared to the 2.6% growth recorded in 2022.
High Household Debt Hampers Economic Growth
Deputy Finance Minister Julapun Amornvivat highlighted the detrimental impact of high household debt on driving economic growth. He stated that both individuals and private sectors are grappling with substantial debt burdens, making it challenging to propel the country’s economy forward. Julapun asserted that this is the underlying cause of the prevailing economic recession and sluggish growth.
Thailand Eyes Issuing Bonds Overseas
In the next one to two years, Thailand plans to issue bonds in foreign currencies such as the dollar, yuan, and yen. Deputy Finance Minister Julapun Amornvivat revealed this initiative, which aims to access international markets for financing. He added that the government intends to sell government savings bonds worth approximately 100 billion baht ($2.81 billion) in the 2024 fiscal year, with the first batch scheduled for March.
Thailand’s Economy Seeks Stimulus for Recovery
With its economy mired in recession, Thailand is urgently seeking stimulus measures to jumpstart recovery. Deputy Finance Minister Julapun Amornvivat affirmed the government’s commitment to its proposed 500 billion baht ($14.05 billion) handout plan, which would provide financial aid to 50 million Thai citizens. The government aims to swiftly implement this plan to provide much-needed relief to the struggling economy.
Thailand to Issue Overseas Bonds; Aims to Diversify Financing Sources
As part of its efforts to diversify financing sources, Thailand plans to issue bonds in foreign currencies, including the dollar, yuan, and yen. This strategic move aims to tap into international markets and bolster the country’s economic recovery. Deputy Finance Minister Julapun Amornvivat revealed that the government intends to issue government savings bonds worth around 100 billion baht ($2.81 billion) in the 2024 fiscal year, with the first batch set to be released in March.
Analyst comment
1) Negative news: Thailand’s Economy in Recession Due to High Household Debt. Short-term market impact: Stock market likely to experience a decline as investors worry about economic slowdown and potential defaults.
2) Negative news: Government Reduces Growth Projections for Thailand’s Economy. Short-term market impact: Investors may become cautious, leading to a decrease in investment and slower market growth.
3) Negative news: High Household Debt Hampers Economic Growth. Short-term market impact: Investor confidence may drop, leading to a decline in market performance and potential capital outflows.
4) Positive news: Thailand Eyes Issuing Bonds Overseas. Short-term market impact: Market sentiment may improve, attracting foreign investors and increasing demand for Thai bonds, potentially leading to a boost in the economy.
5) Positive news: Thailand’s Economy Seeks Stimulus for Recovery. Short-term market impact: Market sentiment may improve, increasing investor confidence and promoting economic recovery.
6) Positive news: Thailand to Issue Overseas Bonds; Aims to Diversify Financing Sources. Short-term market impact: Market sentiment may improve as foreign investors show interest, increasing demand for Thai bonds and potentially stimulating economic growth.
