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Thailand to buy bad household debt to boost economy

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Anouncement sent stocks up nearly 1% in morning trading

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Household debt ratio at 86.8% of GDP, among Asia's highest

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New government plans weekly stimulus to kick-start economy

(Rewrites throughout, adds subheads)

By Chayut Setboonsarng and Orathai Sriring

BANGKOK, Oct 9 (Reuters) - Thailand will spend 10

billion baht ($307 million) to buy bad debt this month, the

finance minister said on Thursday, as part of its plans to

revive its sluggish economy.

Thailand's stubbornly high levels of household debt have

shackled the economy for several years, with the ratio of

household debt to gross domestic product standing at 86.8% by

the end of June, among the highest levels in Asia. The total

amount of debt stood at 16.3 trillion baht ($501 billion).

NO FISCAL BURDEN FROM DEBT PLAN

"The project to buy bad debt will be funded by the 26

billion baht remaining from the previous rehabilitation funds

and contribution deductions, without using any fiscal budget,"

finance minister Ekniti Nitithanprapas told reporters.

The announcement sent the Thai benchmark index up

nearly 1%, the highest jump since Feb 4.

FISCAL DISCIPLINE AND TECH-DRIVEN INVESTMENTS

Fiscal discipline will be enhanced to boost confidence and

there will also be support for new investments in technology, he

said.

Thailand attracted 90.9 billion baht of investments in cloud

services and data centres from the likes of Microsoft ( MSFT )

and ByteDance's TikTok in the first quarter this year, according

to the country's investment board, with TikTok pledging to

invest 126.8 billion baht for a data hosting service.

GOVERNMENT COUNTING ON DEBT RELIEF AND SUBSIDIES

Tackling the debt, alongside a $1.4 billion "co-payment"

subsidy scheme to boost consumption, is part of the government's

plan to jump-start the economy, which could see fourth quarter

growth slip to 0.3% if problems remain unaddressed.

Slowing exports, falling tourist numbers and a strong baht

have also weighed on Southeast Asia's second-largest

economy.

TARGETING STRONGER ECONOMY BY YEAR-END

Ekniti said all the stimulus measures would help the economy

grow at least 1% in the final quarter of 2025 as the government

aims for full-year growth above 2.2%.

That compares with last year's 2.5% growth, which had lagged

regional peers.

The finance minister's comments came a day after the central

bank unexpectedly held rates steady at 1.50% following the

appointment of a new governor.

($1 = 32.57 baht)