Thai Household Debt Hits 18-Year High, Weighing on GDP Target Ahead of Thailand Hosting IMF Meeting
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Thailand's household debt has surged to its highest level in 18 years, becoming a major obstacle to the country's economic growth target, just before Bangkok hosts the annual meetings of the International Monetary Fund and the World Bank next week. Thailand's household debt-to-GDP ratio stood at 85.2% at the end of June, one of the highest figures in Asia. Meanwhile, Thailand's economy is forecast to grow only 2.3% this year, and the Bank of Thailand says pulling the economy back to its potential growth rate of 2.7% will be very difficult without resolving the household debt problem. The issue has been compounded by easier access to digital credit, with buy-now-pay-later service accounts jumping from just 620,000 accounts in 2021 to 6.3 million accounts last year, while loan balances rose from 6.8 billion baht to more than 40.7 billion baht over that period. Finance Minister Ekniti Nitithanprapas noted that the policy interest rate stands at just 1%, and has set a goal of driving GDP growth to 3% within three years by attracting foreign direct investment in key sectors such as the semiconductor industry.