The Finance Ministry hopes to see monetary policy easing soon, a senior official said on Friday, adding that inflation was slowing and was expected to be at 1% for the year, bottom of the 1% to 3% target range.
High interest rates were affecting the public and businesses, while purchasing power was weak, Pornchai Thiraveja, head of the ministry's Fiscal Policy Office (FPO), told a briefing, adding that five projects were being prepared to help with credit access for low income groups.
Thailand's household debt is at about 91% of gross domestic product (GDP), among the highest in Asia, much of it informal loans. The government says that is weighing heavy on Southeast Asia's second-biggest economy, which is lagging peers.
The projects include credit for low income earners and businesses including firms in tourism and wellness, aligned with the government's plan to boost tourism, a key growth driver, said Pornchai.
Other state banks will provide welfare emergency loans to help at least 10 million people, pending cabinet approval, he added.
"These measures must work in conjunction with monetary policy, which we hope to see easing in the future," Mr Pornchai said.
Prime Minister and Finance Minister Srettha Thavisin. (Photo: Chanat Katanyu)
Prime Minister Srettha Thavisin, also the finance minister, has locked horns with the Bank of Thailand (BoT) recently over an interest rate currently at 2.5%, which he has repeatedly urged be cut to help consumers and businesses suffering at decade-high borrowing costs.
He maintains the economy is at a "critical" stage and monetary policy easing could help significantly as the economy faces challenges from household debt and China's slowdown.
On Tuesday, permanent secretary for finance Lavaron Sangsnit said government revenue collection has missed the target, signalling an economic slowdown, largely attributed to diminished purchasing power caused by high interest rates.
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