Srettha vows to tackle informal debt to revive economy

Srettha vows to tackle informal debt to revive economy

Srettha: Informal debt is like modern-day slavery
Srettha: Informal debt is like modern-day slavery

The government will prioritise tackling informal debt to revive the economy, Prime Minister and Finance Minister Srettha Thavisin said on Tuesday.

"Informal debt is like modern-day slavery that destroys dreams ... and a chronic problem," he told a press conference, adding the government would coordinate with police to prevent unregulated lending.

He said the measures, to solve one of the region's worst household debt problems, will help with debt restructuring and prevent people from taking on more debt that necessary.

The government estimates there is about 50 billion baht (US$1.43 billion) of informal debt, he said, adding that this was a conservative estimate and the problem could be larger.

"In the past we didn't take this problem together. We are more proactive, involving the administration, police and the Finance Ministry working together," Mr Srettha, a real estate tycoon and newcomer to politics, said.

Thailand will also be taking on formal debt, in a country where household debt is about 90% of gross domestic product (GDP).

Last week, Mr Srettha said that the country's economy was in crisis, stressing the need to forge ahead with his government's controversial 500 billion baht ($14.23 billion) digital handouts policy.

The "digital wallet" policy, which entails handouts of 10,000 baht to 50 million Thais next year to spend in their localities, has come under criticism in recent months by economists and former central bankers over risks of it breaching financial discipline.

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