The National Economic and Social Development Council (NESDC) has warned that rising household debt may slow the country’s economic recovery, as people use their income to repay debt rather than spend on consumption.
NESDC deputy secretary-general Jinanggoon Rojananan said the latest wave of COVID-19 infections has triggered not only a surge in household debt, but also a drop in income. The infections have also affected people’s ability to repay debts, leading to an increase in the amount they owe.
She suggested, in the short term, that the government speed up the implementation of debt restructuring programs for both new debtors, who are affected by the outbreak, and older debtors, who have undergone debt restructuring, but still risk becoming non-performing loans due to the latest wave of infections.
Ms. Jinanggoon said the government needs to emphasize provision of assistance to low-income earners, because their financial plight is much more serious than other groups, while aid measures are desperately needed for small and medium-sized enterprises, to enable them to retain employees. (NNT)
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