Thailand Faces Crisis Amidst High Household Debt

Thailand's Prime Minister, Srettha Thavisin, has declared that the country is experiencing an economic crisis.

"I confirm that the (Thai) economy is not doing well and is in crisis," Srettha said, as reported by the *Bangkok Post* on Wednesday, January 24, 2024.

Similarly, Thailand's Deputy Finance Minister, Julapun Amornvivat, stated that the country's economy is struggling due to high household and private sector debt.

"It's now at a dangerous level, a kind of economic recession. It's difficult to stimulate economic growth. That's why we see slow economic growth (in Thailand)," Julapun said, as reported by *Reuters* on Monday, January 29, 2024.

According to data from the International Monetary Fund (IMF), Thailand's household debt has ballooned over the past two decades.

In 2003, the ratio of household debt to Thailand's gross domestic product (GDP) was 42.24%.

This figure steadily increased, reaching 86.9% of GDP in 2022.

According to the Bank of Thailand (BoT), the country's central bank, the total value of Thailand's household debt in 2022 reached THB 14.9 trillion, or approximately Rp6,632 trillion (assuming an exchange rate of Rp445 per THB).

In its report, *Sustainable Solutions to Thailand’s Household Debt Problems* (February 2023), the BoT stated that almost one-third of Thailand's household debt comes from credit cards and consumer loans.

The BoT also noted that certain groups have high debt burdens, such as farmers and entrepreneurs with unstable incomes, and employees with stable but low incomes.

"High household debt will hinder long-term economic growth, as a large portion of people's income will be used to repay debt instead of spending on goods and services," the BoT said in the report.

"Debt problems can also pose risks to the country's financial stability. Therefore, resolving household debt issues is a major challenge facing Thailand," the BoT added.