Thailand’s upcoming general election is set to revolve around the nation’s growing household debt levels, with one in three Thais reportedly trapped in debt.
According to a Bank for International Settlements ranking, Thailand has among the highest household debt to gross domestic product (GDP) ratios in Asia, falling behind only South Korea and Hong Kong.
The debt burden appears to start early for many Thais and can last a lifetime, with 58% of people aged 25 to 29 already in debt and a quarter of people over 60 still carrying outstanding loans. The pandemic only exacerbated the problem, as the central bank reports nearly doubling the number of bad debt accounts to 10 million.
In response, political parties are promising various measures to tackle the issue, including wage increases, debt moratoriums, guarantee-free loans and handouts. However, analysts warn that such promises could lead to increased macroeconomic risks.
The central bank has also expressed concern over the issue and is urging the government to take action to reduce household debt levels. The bank recommends lowering debt levels from 86.9% of GDP at the end of 2022 to below 80% in order to further reduce financial risks. (NNT)