Start spending to help debtors, state urged

Start spending to help debtors, state urged

The government is being urged to speed up fiscal budget disbursement as fast as possible, as state spending is the only current driver of the economy and a vital source of income for debt-ridden Thais.

A worker puts up an advertising board at a department store in Bangkok. Government projects are seen by many as the only driver of Thailand's economy this year. SEKSAN ROJJANAMETAKUN

The call was made by the University of the Thai Chamber of Commerce (UTCC) after its survey on household debt.

"The latest survey shows the ratio of unorganised debts for low-income earners is higher than organised debts for the first time in many years," said Prof Sauwanee Thairungroj, UTCC president. "This means low-income earners are really struggling with drastic financial hardships."

A survey of 1,272 people nationwide from Oct 7-11 found unorganised debts were estimated to account for 50.4% of total debts per household, with organised debts making up 49.6%. Unorganised debts are those from the informal sector such as loan sharks.

Household debts were estimated at 220,000 baht per family, up 4.76% from 210,000 baht per family in July. The July survey found unorganised debts represented 49.1% of total debts while organised debts amounted to 50.9% per family.

Rising unorganised debts were found mainly among families earning less than 10,000 baht a month, usually farmers and labourers.

"This indicates the economy is still doing poorly," she said. "However, higher unorganised debts are not all bad, as they help ease the financial constraints of low-income earners who cannot access organised loans in their time of need."

Prof Sauwanee also urged authorities to be alert to unfair debt collection including unpleasant debt-chasing practices, as well as hefty interest rate charges.

The survey found a majority of people expect the recently announced economic stimulus packages to "slightly" increase public consumption, saying most people are caught off-guard by higher costs of living, economic uncertainties, high household debts, low income and falling crop prices.

The government approved a 364.5-billion-baht stimulus package earlier this month that includes a cash payment of up to 15,000 baht each for more than 3 million rice farmers. Other stimulus measures include expediting payment of 129 billion baht from the fiscal 2015 investment budget across all ministries.

Another 147 billion baht will be spent on projects under the fiscal 2014 budget that are slated to be implemented in the last three months of the present calendar year. Some 23 billion baht from remaining Thai Khem Khaeng projects will be spent on repair work under the Education and Public Health ministries, as well as on irrigation projects.

The government will also accelerate spending of 24.9 billion baht left over from budgets stretching back to fiscal 2005.

The measures come after mounting concerns that GDP could come in below 2% this year.

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