Thailand’s household debt reaches 104% of GDP, raising economic concerns
Thailand’s household debt, encompassing informal loans, has risen to 104% of GDP, potentially impacting future economic growth, as revealed by a private sector panel report.
Research conducted by Chulalongkorn University for the Joint Standing Committee for Commerce, Industry and Banking (JSCCIB) shows the country’s household debt-to-GDP ratio reached 104% in the fourth quarter of 2024, with informal loans included in the assessment.
The average informal debt per household was calculated at 98,538 baht (US$2,843). Kobsak Duangdee, Secretary General of the Thai Bankers’ Association, noted after a JSCCIB meeting that 40% of Thai households have informal debt, either as creditors or borrowers.
High household debt levels present a challenge to Thailand‘s economic growth, Kobsak stated. However, informal debt is crucial for household liquidity, providing a funding source for daily expenses and business activities, and aiding in managing financial emergencies.
According to the study, about 30% of households with formal economy income depend on informal debt for liquidity management. Addressing informal debt requires suitable measures, and digital technology could play a role, Kobsak suggested.
The study highlighted that creating a borrower database, including individuals and small and medium-sized enterprises (SMEs), could enhance access to funding sources. This would aid households and SMEs in managing debt more effectively, thereby supporting the long-term sustainability of economic growth.
In a separate statement, Sanan Angubolkul, Chairman of the Thai Chamber of Commerce, mentioned the JSCCIB anticipates Thai GDP growth of 2.4 to 2.9% this year, compared to a projected 2.8% in 2024. Growth in 2025 is expected to be led by the tourism sector, with an estimated 39 million foreign arrivals and government stimulus measures in the year’s second half.
Export growth is estimated at 1.5 to 2.5% this year, down from 4% last year, while inflation is projected at 0.8 to 1.2%, an increase from 0.4% in 2024. Sanan expressed that the country’s GDP growth rate is below its potential, underscoring the need for structural reforms to sustain long-term growth, reported Bangkok Post.
He predicted continued economic improvement in the first half of this year, driven by positive momentum and government measures. However, maintaining this trend requires ongoing stimulus in the second half, Sanan said.
“If stimulus measures end in the second half and the government implements proposed tax increases, it could pressure large corporations amid rising challenges for households and SMEs.”
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