Government’s plans to help indebted individuals and companies likely to boost economy and profitability of companies

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The move by the government of Prime Minister Paetongtarn Shinawatra to offer various stimulus to revive consumption and kick start the domestic economy is likely to start paying dividends in 2025 with many businesses starting to feel more confident about the prospects in the year ahead.

As part of the move to stimulate the economy and pump liquidity into the system, the Prime Minister and the Cabinet on Wednesday announced new set of measures that would look at ways to help indebted individuals and businesses by offering to help to up to 2.3 million accounts.

Prime Minister Paetongtarn announced that her cabinet passed a proposal that includes plans to lower the fees for transferring funds or assets from the Financial Institution Development Fund (FIDF) to repay loans FIDF1 and FIDF3. The fees will be reduced by half, to 0.23% per year, with the savings used to help pay interest for the borrowers.

The program will assist 3 groups of debtors by offering a 3-year interest payment suspension for non-performing loans (NPLs) of less than 1-year, covering a total debt value of 1.31 trillion Baht across 2.3 million accounts.

The program will provide support for housing loans of up to 3 million Baht per borrower, benefiting 460,000 accounts with a total value of 483 billion Baht. It will also assist auto loans of up to 800,000 Baht per vehicle, covering 1.4 million accounts with a total value of 375 billion Baht.

Additionally, small & medium sized enterprises (SME) loans of up to 3 million Baht per borrower will be supported, benefiting 430,000 accounts with a total value of 454 billion Baht.

This move was welcomed by businesses and investors who feel that it would give a breathing space to businesses and individuals in order to kickstart the economy that is expected to grow at 2.8% at best in 2024.

The ability for individuals to be able to continue with their daily lives without having any disruption and for SMEs (which accounts for about 80% of total employment in Thailand and more than 35% of Thailand’s gross domestic product), is likely to help start yet another engine of growth for the Thai economy in 2025.

Such optimism comes on top of the already positive momentum that businesses had prior to the move undertaken by the Paetongtarn government on December 11.

A recent survey by UOB indicated that as much as 87% of those surveyed anticipated that their revenues would rise over the next year and the following year.

As much as 39% of those surveyed said that their revenues would rise by more than 30% in 2025, 28% said that they would see their revenues rise by as much as 30-50% in 2025 and about 20% said that their revenues would rise by more than 50% in 2025.

As for 2026, the number for those expecting revenues to rise by more than 50% was a staggering 34%. The Business Outlook Study 2024 conducted by UOB covers with more than 500 business owners and key executives from small and medium-sized enterprises and larger companies in Thailand. This survey provides a comprehensive understanding of the current business sentiment, inflation impact and outlook among businesses across various sectors.

To read the complete study, please visit https://www.uobgroup.com/asean-insights/articles/uob-business-outlook-study-2024-thailand.page

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