Household debt in Thailand at 15-year high

Illustrative photo (Photo: Courtesy of Freepik)

Average household debt in Thailand has reached a 15-year high due to a slower-than-expected economic recovery and high living costs, amid uncertainty over the formation of a new government, a survey showed.

Average debt stood at 559,409 THB (about 16,000 USD) in 2023, up 11.5% from the previous year, according to the survey by the University of the Thai Chamber of Commerce (UTCC).

The recovery of Southeast Asia’s second-largest economy has lagged behind others in the region as the vital tourism sector just started to recover last year from the pandemic, while soft global demand continues to stall exports.

Survey respondents thought they would continue to borrow more for at least six months, the university's president Thanavath Phonvichai said at a briefing.

The debt levels should peak in 2024, he said, adding that despite the election, the economic recovery remains unclear, meaning people continue to face economic problems with high living costs and low incomes until early next year.

The Thai parliament on July 27 postponed a vote for the next prime minister, delaying the formation of a government and policies to boost the economy.

The economy is expected to grow between 3.0% and 3.5% this year, Thanavath said, noting that the delayed government formation would have more impact on growth next year.

The ratio of household debt to gross domestic product (GDP) stood at 90.6% at the end of March. Policymakers have expressed concerns about the high debt, particularly among low-income earners./.

VNA