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Thai central bank institute says debt moratoria should be used sparingly

Tan KW
Publish date: Thu, 21 Sep 2023, 02:42 PM
Tan KW
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BANGKOK The research arm of Thailand's central bank on Thursday said debt suspension should be a tool only used in times of emergency such as a pandemic or natural disasters.

The comments come as Thailand's new government introduces debt management policies aimed at the agriculture sector. Prime Minister Srettha Thavisin has said any debt moratorium for framers will not create moral hazard and will adhere to fiscal discipline.

Suspending farmer debt should only be used as a short-term measure, include incentives to create financial discipline and not be the sole mechanism to curb the risks facing farmers, according to the Bank of Thailand's (BOT) Puey Ungphakorn Institute for Economic Research.

The government has already cut electricity prices to bring down living costs and plans to raise the daily minimum wage.

Srettha's signature policy is a 10,000 baht handout in the form of a digital wallet to all Thais, a project worth 560 billion baht to boost spending.

The central bank governor this month said recovery in Southeast Asia's second-largest economy should
focus on stability and there was little need to increase consumption.


  - Reuters


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