The cabinet approved debt suspension for smaller businesses and support for retail debtors, as the government will try to maintain diesel prices and electricity bills, Prime Minister Srettha Thavisin said on Tuesday.
The relief programme is part of a plan to help the 10.3 million people who are struggling to service debt, a drag on Southeast Asia's second-largest economy, where household debt stood at 90.7% of gross domestic product (GDP) at the end of the second quarter of this year.
The government will also try to keep diesel prices at around 30 baht (US$0.85) per litre and electricity bills at up to 4.2 baht per unit to help lower energy costs, Mr Srettha, also finance minister, told reporters.
The diesel price cap would be for three months and supported by tax measures and the national oil fund, Energy Minister Pirapan Salirathavibhaga said.
New electricity bills would be decided in January, but vulnerable groups will be offered the current rate of 3.99 baht per unit, Mr Pirapan said.
In November, the prime minister has said resolving the informal debt problem, which he likened to modern-day slavery, is a national agenda item.
On Monday, government spokesman Chai Wacharonke said that the government's debt solution plan will bring 500 billion baht back to the economy if successful.
"If it is effective, the plan will return at least 500 billion baht to the national economy and allow some 5 million people to rebound in society and be productive," Mr Chai said.
Government subsidies have helped keep inflation low, with the headline inflation rate coming at -0.44% in November, the lowest in nearly three years.
Prime Minister Srettha Thavisin has announced economic measures, including debt suspension and reduced interest rates, at Government House on Dec 12, 2023. (Photo: Chanat Katanyu)